Dive Brief:
- According to Dodge Data & Analytics, March's monthly construction starts fell 1% from February to a seasonally adjusted annual rate of $660.5 billion. The dip was largely due to a 30% plunge in the nonbuilding sector, the effects of which were mitigated by a 23% surge in the nonresidential sector and a slight 3% rise in residential.
- Dodge reported that total first quarter starts were valued at $141.7 billion, down 10% year over year.
- If the major plunge in gas and electric starts were excluded from Dodge’s calculations, the construction data company said March month-to-month starts would be 4% higher than February and down only 4% from the first quarter of 2015.
Dive Insight:
Dodge Data & Analytics Chief Economist Robert Murray said the increase in nonresidential, spurred along by the 44% rise in institutional starts, was the standout for the month. Using historical figures of institutional trends, he said that March’s education (20%) and transportation (339%) activity could be pushing nonresidential into "expansion mode."
Boosting March nonresidential starts were the $663 million rail terminal caverns at Grand Central Station in New York City, the $537 million terminal building at Louis Armstrong International Airport in New Orleans and $292 million of work at the new Toyota headquarters campus in Plano, TX. Multifamily drove the residential sector’s growth with 12 projects of more than $100 million getting underway. While nonbuilding was a disappointment overall, that sector did see the kickoff of big solar power projects in California ($1.3 billion for two projects), Utah ($450 million), Texas ($298 million), Idaho ($200 million) and Alabama ($200 million).
The Commerce Department reported this month that housing starts fell 8.8% from February to March and that new applications for building permits dropped 7.7%. The agency also reported that single-family (-9.2%) and multifamily (-8.5%) construction was down and said this decrease in activity could foretell a "cooling" of the housing market.
