Dive Brief:
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Housing starts had an impressive showing in June, but were not strong enough to pull the number of new construction projects out of negative territory when lumped with nonresidential and nonbuilding groundbreakings.
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Dodge Data & Analytics said Wednesday that overall construction starts in June dropped 15% from the previous month. Put into context, however, the dip came after especially strong May numbers that included the start of a $9 billion liquefied natural gas plant terminal in Texas.
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Nonbuilding construction fell sharply in June in response to the absence of another oversized expansion and because of scant activity in the utility sector, the report noted. Nonresidential building suffered a less severe loss, while residential starts, buoyed by a rush of new apartment construction, increased.
Dive Insight:
Although starts were down between May and June, 23% more projects started in the first six months of 2015 than during the same timeframe a year ago, Dodge Data & Analytics reported.
That number, however, “overstates the strength of the expansion,” Dodge Chief Economist Robert A. Murray said in a release, because it reflects a handful of huge utility construction starts early in the year that won’t be repeated in the coming months. A more accurate estimate of the industry’s expansion, he said, is around 10%.
Still, year-over-year, activity is up. And if Congress passes a measure to more permanently fund the Highway Trust Fund, Murray speculated, nonresidential building starts will increase.