ConstructConnect: August nonresidential starts down 9.8%
Nonresidential starts valued $28.7 billion in August, down 9.8% from July, which is more than double the typical seasonal July-to-August drop of 3.5%, according to ConstructConnect.
The decline was driven by steep tumbles in the commercial (-25%) and institutional (-22.7%) categories. Engineering starts were up 6.8% and industrial starts increased 85.1%, but the numbers weren't enough to bring August's trajectory out of the negative.
The year-over-year picture wasn't any better, with overall starts down 18.5% thanks to major declines in the commercial (-48.9%), industrial (-42.1%) and institutional (-15.7%) categories. Year-to-date news was a little better with an overall increase of 1.6%.
In its Q3 2017 Construction Starts Forecast Report, ConstructConnect lowered its growth projections for 2017 year-over-year construction starts from 4.8% as of Q2 to 4.5%, with progress through the end of the year fueled by residential (4.8%) and civil engineering (16.5%) activity. A significant infrastructure construction program led by private investment is still expected to boost the civil engineering category.
So far, a detailed infrastructure plan has yet to materialize from the White House. The only information around the $1 trillion program suggested by President Donald Trump during the campaign that has come forth is contained in the administration's 2018 budget proposal, which specifies a $200 billion direct spend to spur $800 billion of private investment. More details are said to be forthcoming this fall.
Meanwhile, infrastructure grants and allocations have been coming in drips and drabs. Last week, the USDOT allotted $500 million for Transportation Investment Generating Economic Recovery (TIGER) grants, even though Trump's budget calls for the program's elimination. The award amounts are between $5 million and $25 million, and grants for projects in rural areas have a $1 million minimum.
- ConstructConnect In August, ConstructConnect’s Starts -10% vs July, but +2% YTD
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