For the third month this year, construction starts ascended in May, climbing 3% from the prior month and 25% when compared with May 2014, according to Dodge Data & Analytics.
Nonbuilding construction — especially in the electric power and gas plant category — took off last month, jumping 59% in one month. The huge increase is due, in large part, to the start of two solar power facilities in California worth a combined $1.58 billion; a massive $9 billion liquefied natural gas plant in Texas; and a $600 million natural gas-fired power plant in Indiana, the report said.
However, starts on mega-projects are expected to taper off for the rest of the year, Robert A. Murray, Dodge Data’s chief economist, said in a release. Still, he said an underlying upward trend in starts will keep the industry growing at about a 10% pace.
The survey noted one surprise: Although public works as a group slipped by 3% in May, the category “has proven to be surprisingly resilient so far in 2015,” the report noted, as states and local governments have “picked up some of the slack” left by the lack of increases in federal transportation funding.
Still, the authors cautioned: “Public works still faces near-term uncertainty” as states wait for Congress to find a permanent solution to what the industry considers underfunding of the national transportation infrastructure.
Senate Democrats last week threatened to stop funding future short-term extensions of the Highway Trust Fund if Republicans do not negotiate a long-term funding extension.