Volatile nonresidential construction starts plummet 27.7% in July

Dive Brief:

Nonresidential construction starts plummeted by 27.7% between June and July, construction data provider CMD Group reported on Tuesday.
Retail construction led the decline, with 72% fewer groundbreakings in July than during the month before. All major nonresidential construction categories lost momentum last month, the report said, including commercial, with a 34% decline; heavy engineering, down 27.2%; institutional, 24.6%; and industrial, 9.8%.
On the upswing, however, was government office construction, which increased 67.7% last month, and warehouse starts, which rose 59.9%, according to the report.

Dive Insight:

Nonresidential construction starts have been on a roller-coaster ride this spring, beginning with a 37.3% upward leap in May over April, largely because of groundbreakings on a few huge commercial projects. Then in June, the number of nonresidential construction projects that broke ground barely budged, but still rose just slightly.

Still, July's poor showing — 12% less than a year ago — didn't mean that no new projects were started. In fact, July’s new construction total was $22.4 billion.

Among the largest projects that broke ground in July were the Phillips 66 LPG Export Facility in Texas, worth $1 billion; the Boston Convention & Exhibition Center, a $600 million project; and a $498 million Business Depot in Ogden, UT.

The homebuilding sector had better luck in July: The U.S. Commerce Department on Tuesday reported a 12.8% increase in single-family home starts and a 0.2% bump in new-home construction starts overall.