CMD: Jan. construction starts beat expectations, jump 9.8%

Dive Brief:

The value of January nonresidential construction starts increased 9.8% from December to $24.7 billion, a significant departure from the typical December-to-January seasonal decline of 8.5%, CMD reported. Nonresidential starts were up 12.9% from January 2015 and up 18.6% on a five-year January average.
Institutional (21.3%), heavy engineering/civil (13.6%) and commercial starts (3.8%) were all up month-to-month, but the smaller-dollar volume industrial (-49.1%), which relies on megaprojects and can vary greatly, was nearly cut in half. Comparing these categories with the same month in 2015, commercial (13.2%), institutional (2.6%), heavy engineering (20.1%) and industrial (10.3%) all showed increases.
Across all categories, four subcategories that performed better in January 2016 than on average during January of the previous five years were hotels/motels (227.7%), roads/highways (52.4%), bridges (51.8%) and warehouses (34.3%).

Dive Insight:

CMD’s Top 10 projects of the month were geographically diverse, with each of the projects in a different state. In addition, no project in January exceeded $1 billion in value. The top three projects in dollar value were the Sobro JW Marriott Nashville Tower in Nashville, TN ($300 million); the Omni Hotel and Residences in Louisville, KY ($289 million); and TXDOT IH 30 Roadways in Tarrant County, TX ($233 million).

Month-to-month, total jobs in architectural and engineering services were up only 0.2%, and year-over-year, they were up 2.3%.

CMD noted that the latest Employment Situation Report from the Bureau of Labor Statistics (BLS) reported a 18,000 job increase, which, while still a significant increase, was far short of the rates in October, November and December of 2015. According to the BLS, year-over-year employment in construction was up 4.2% but decelerating.

CMD's report also highlighted the issue of a dwindling supply of labor in the construction industry, which follows a late-year surge in job gains that many industry experts attributed to a softening of the energy sector and to higher wages that employers instituted in order to draw more workers into construction.