Dive Brief:
- According to Dodge Data & Analytics, January's monthly construction starts increased 2% from December to a seasonally adjusted annual rate of $607.9 billion, with all gains attributed to the residential sector.
- Dodge said the projected value of projects breaking ground dropped 14% from the year before, but for the 12-month period ending January 2016, overall construction starts increased 6% from the previous 12-month period.
- Month-over-month, residential construction was up 5% from December to a rate of $294 billion. However, nonresidential was down 1% to a rate of $180.3 billion, while nonbuilding dropped 2% to a $133.7 billion rate. Single-family housing increased 6%, and multifamily rose 2%. Within nonresidential, institutional fell 10% and commercial rose 3%. And in nonbuilding, utility plants dropped 18%, highway and bridge rose 19% and sewer-hazardous waste shot up 68%.
Dive Insight:
Robert Murray, chief economist for Dodge Data & Analytics, said January’s numbers indicate that construction "seems to be gradually regaining upward momentum." Murray added that starts were up "at a healthy clip" in the first half of last year, then plummeted 20% in the third quarter before rising a slight 1% in the fourth.
As for the bigger economic picture, Murray said that he sees strong signs — such as low, long-term interest rates, occupancy and rent levels, and the new, five-year transportation bill and fiscal 2016 federal appropriations.
However, Murray also said the worldwide economy is "struggling," and energy prices are down in addition to the stock market — creating an atmosphere of uncertainty.
Last week, American Institute of Architects Chief Economist Kermit Baker cited similar concerns with the global economy as reasons for the dip in architectural billings in January. "Some of the fallout of this uncertainty may have affected progress on design projects," he said in a release.
