ConstructConnect: January nonresidential starts slump 9%
- The value of January nonresidential construction starts dropped 9.1% to $24.6 billion from an upwardly revised December figure of $27.06 billion, a seasonal decline due to severe winter weather and in line with the typical December-to-January slip of 8.5%, according to ConstructConnect.
- The month-to-month falloff was led by the commercial (-14.4%) and heavy engineering (-12.3%) categories, but institutional almost reversed its December losses with a 6.3% uptick in activity.
- Year over year, January 2017 saw 11.6% fewer starts than January 2016, with declines in commercial (-18.9%) and heavy engineering (-15.4%) at the heart of the backslide. Once again, however, institutional reversed its negative direction and posted a 3.5% year-over-year gain.
Despite the year-over-year loss, January's nonresidential starts still came in 6% higher than the average of the last five years of January starts. Architecture and engineering jobs from January 2016 to January 2017 were up as well. Between December and January, overall construction positions grew by 36,000 jobs, the highest month-over-month increase since March 2016. Looking back at employment through 2016, average increases were 12,000 per month.
January's list of the 10 largest project starts ranged from $1 billion to $150 million. The top five nonresidential projects in dollar value were the Chase Center and Warriors Mixed Use Office and Retail — San Francisco ($1 billion); Piedmont Hospital–Marcus Heart & Vascular Center — Atlanta ($603 million); Fort Worth Multipurpose Arena at Will Rogers Memorial Center — Fort Worth, TX ($450 million); Christiana Care Health Systems Neonatal Intensive Care Unit (NICU) Addition & Parking Garage — Newark, DE ($195 million); and the United Technical Operations Center at IAH — Houston ($162 million).
Although the commercial category was down both month-to-month and year-over-year, its "miscellaneous" category was up 516.3% from December 2016 and 240.4% since January 2016. Certainly projects like the Golden State Warriors arena helped that along, but in its latest starts report, Dodge Data & Analytics points to the project class of airport terminals as driving the 16% increase in total nonresidential construction starts last month.
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