Dive Brief:
- Driven by growth in the nonresidential sector, the value of October construction starts rose 13% from September to an annual rate of $591.1 billion, Dodge Data & Analytics reported. Construction starts were also up 10% year-to-date in October, at $551.9 billion.
- Nonresidential projects spiked 32% in October to $200.7 billion, and construction of retail stores rose 56%, Dodge reported. In addition, office building construction increased 45%. Residential building was also in positive territory, with a rise of 9% to an annual rate of $260.3 billion.
- Nonbuilding construction fell 3%, Dodge reported, to an annual rate of $130.2 billion, with electric utility and natural gas starts dropping 21%.
Dive Insight:
Nonresidential highlights were a $561 million expansion and upgrade of the Westfield Century City Mall in Los Angeles; the $570 million first phase of a $1 billion Facebook data center in Fort Worth, TX; and a $300 million Google data center expansion in Lithia Springs, GA.
The residential sector was helped along by the start of 11 multifamily projects of $100 million or more.
Robert Murray, Dodge chief economist, said in a statement, "The healthy increase for construction starts in October alleviates concern about a stalling expansion that may have arisen with the sluggish activity in August and September."
New construction volume fell 5% in September after posting an 11% month-to-month drop in August, according to Dodge.
Last month, Murray chalked up the increase in nonbuilding construction early in 2015 to several energy megaprojects after the sector’s poor showing in September, and it looks like nonbuilding construction has not yet recovered. He also forewarned that the lack of a long-term highway funding bill from Congress could significantly affect the sector, but made no mention of the latest extension or Congress’s efforts to agree on a bill to send to President Obama.
Dodge noted that all month-to-month figures in its latest report are seasonally adjusted, but the year-to-date numbers are not.
