May construction starts inch up as volatile recovery continues
- Construction starts saw a slight 1% uptick in May after an April fall of 13% to a seasonally adjusted annual rate of $651.2 billion, according to Dodge Data & Analytics.
- Four big pipeline projects totaling $3 billion revived the public works category of the nonbuilding construction sector by 30%, increasing nonbuilding overall by 23% from April to May. This made up for declines of 4% in both the nonresidential and residential sectors and kept total May starts figures positive.
- Total construction starts maintained their positive 3% year-over-year average but were down 5% year-to-date, January through May, compared with 2016. The Dodge Index gained one point between April and May, bringing that score to 138.
Once again, Dodge pointed out the volatile nature of the construction industry recovery and said activity should improve this year, buoyed by still-low interest rates and investment in public construction as a result of state and local bond measures. The industry still awaits passage of a robust federal infrastructure plan, but economists said any such initiative would likely not impact the construction industry until 2018.
Aside from the four pipelines, other large projects that got underway in May included a $500 million natural gas-fired power plant in Pennsylvania, a $975 million chemical plant expansion in Louisiana, the $442 million Marcus Tower project at Piedmont Hospital in Atlanta, and a $450 million multifamily building in New York City.
Earlier this month, ConstructConnect also reported an uptick in month-to-month nonresidential starts, although the 5% increase was short of the expected seasonal jump of 8%. Heavy engineering saw a 4.5% decline, but all the other categories that ConstructConnect tracks — commercial (8.1%), industrial (6.5%) and institutional (16.4%) — were up in May.
- Dodge Data & Analytics New Construction Starts in May Edge Up One Percent
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