Dive Brief:
- The value of September construction starts fell 5% between August and September, to an annual rate of $523 billion, but rose 12% from January to September when compared with the same period last year, Dodge Data & Analytics reported.
- September nonresidential construction dropped 4% from August, to a $152.9 billion annual rate, and residential work fell 11%, to a rate of $236.9 billion. The nonbuilding sector rose by 5% to a rate of $133.9 billion, according to Dodge.
- Overall, residential construction was up 17% year over year for the first nine months of 2015, to $200.2 billion, and nonbuilding construction spiked 35% to $143 billion. However, Dodge reported, nonresidential construction was down 7% to $154.2 billion during that same period.
Dive Insight:
Multifamily housing volume dropped 30%, contributing to residential’s September decline, and drops in education (20%) and public buildings (42%), combined with increases in commercial buildings (4%) and office buildings (20%), led to nonresidential's contraction.
Robert Murray, Dodge chief economist, attributed the unsustainable rate of increase in nonbuilding construction early in the year to several energy megaprojects and cautioned that the transportation bill now before Congress will significantly affect that sector’s future performance.
Current transportation funding will expire on Oct. 29, and, unfortunately for the nonbuilding construction sector, the House's bill only includes three years of funding. The bill, however, is not expected to pass before the expiration of current funding. Experts predict Congress will grant yet another extension, adding to the uncertainty that has plagued nonbuilding for the last several months.
