Dive Brief:

• Dodge Data & Analytics reported the value of construction starts in December fell 5% from November to a seasonally adjusted annual rate of $613 billion, marking the fourth consecutive month that the value of new projects decreased.
• The nonbuilding sector plunged 41% in December due to a retreat in the utility plant and public works segments. However, residential starts rose 9% on the back of multifamily, while nonresidential provided a mixed bag of segment activity and performed at the same rate as it did in November.
• The 1% year-to-date increase for the full year 2016 put starts at $676.5 billion, down 10% from the same period in 2015. When excluding the unevenness of utility plant construction, Dodge said 2016 starts were up 4% in 2016, as compared to a 9% lift in 2015 under the same conditions.

Dive Insight:

The decline in December starts pushed the Dodge Index down to 130, a six-point difference from its upward-revised November reading of 136. The Index averaged 143 for the full year in 2016, a slight uptick from 2015, according to Dodge Chief Economist Robert Murray.

Murray characterized the 2016 construction industry as being in "a more mature stage of expansion" after the robust start increases seen in previous years, noting that he expected to see the same moderate pace in 2017. Overall, 2016 saw the continuation of a strong commercial segment, a minor rebound for institutional and significant gains for multifamily. Single-family exhibited modest increases, while public works, manufacturing plant and gas plant starts were all down.

Both public works and school construction should get a boost from bond measures in 2017, and infrastructure construction starts could see a ramp-up depending on how President Donald Trump's proposals are implemented. Millennials are still forming new households, which should keep single-family construction healthy.

However, December was a different story in ConstructConnect's report this week, which found an unexpected, unseasonal increase in nonresidential starts of 3.4% ($24 billion) from November. The commercial and heavy engineering categories were solid performers with 9% and 2.9% growth respectively, but industrial starts were down 9%. Full year 2016 starts were also in the positive, increasing 6.8% from 2015, according to ConstructConnect.