CMD: Feb. nonresidential starts plummet 22.2% as seasonal decline catches up
- The value of February nonresidential construction starts plummeted 22.2% from January to $19.1 billion, a sign that the seasonal decline that would typically have taken place in the December-to-January period finally materialized last month, CMD reported
- The standard seasonal drop typically sees January and February combined take an average hit of -8.5%, but January’s starts were abnormally high, so the significant drop, overall, puts starts somewhat lower than the seasonal average.
- Year-to-date starts are 3.7%; however, compared with February 2015, starts saw a drop of 5.1%, and from February 2011 to 2015, starts experienced a decline of -8.5%
Month-to-month, total jobs in architectural and engineering services inched up 0.4%; however, year over year, jobs in these industries rose a much healthier 3%. CMD noted that with a bump of just 1%, these job numbers once again would be at their pre-recession high.
CMD also noted that the latest Employment Situation Report from the Bureau of Labor Statistics (BLS) determined there was a 19,000 seasonally adjusted February job increase, which, while still a slight increase from January’s numbers, indicate that the nonresidential construction sector is having staffing problems. According to the Associated General Contractors of America, last month's slowdown, at least when compared with the impressive fourth-quarter employment numbers of October, November and December, indicated that "many nonresidential construction firms have run out of people to hire."
Most February month-to-month starts were in the negative. Month-to-month starts were down in commercial (-32.2%), heavy engineering (-28.4%), industrial/manufacturing (-31.8%) and even institutional (-2.2%), although the losses in that category were so low as to almost be considered break-even.
CMD's 10 largest project starts of the month were scattered geographically, with Texas laying claim to three. The top five projects in dollar value were Dallas Storm Drainage Tunnels — Dallas, TX ($250 million); Los Angeles International Airport Runway — Los Angeles, CA ($111 million); US Navy Electronic Science & Technology Laboratory — Washington, DC (100 million); Center Hill Auxiliary Dam Berm & Left Rim — Lancaster, TN ($100 million); and University Flats Student Housing — Lexington, KY ($100 million).