Starts Value Drops in September
Dodge Index Declines Six Points
The value of nonresidential, residential and nonbuilding construction starts combined fell 5 percent in September, compared to August.
The value of all construction starts nationwide declined 5 percent from August to September to just slightly above $500 billion, Dodge Data and Analytics reports.
As a result of reduced building activity, the Dodge Index dropped to a reading of 111 from 117 in August. The index began in 2000 and established its benchmark level at 100.
"The pace of construction starts was subdued during both August and September, retreating from the strength shown earlier in the year," Robert A. Murray, chief economist for Dodge Data and Analytics, said.
Nonresidential spending dropped 4 percent to $152.9 billion in September. The decrease is attributed to spending reductions in the commercial, institutional and manufacturing sectors, compared to 2014.
Institutional building fell 13 percent. Education spending lost 20 percent, even though several large projects broke ground in September. Those included a $300 million Academy Museum of Motion Pictures in Los Angeles; a $130 million prep school in New York, N.Y.; and a $115 million building on the University of Connecticut campus in Hartford.
Courthouses, police and detention facilities dropped 42 percent, and religious buildings shed 31 percent. In contrast, transportation spending jumped 21 percent, aided by the start of a $150 million airline terminal in Houston, Texas. Amusement-recreational facilities climbed 12 percent, and health care-related construction went up slightly, by 2 percent.
Commercial building increased 4 percent, after dropping 24 percent in August. Office construction climbed 20 percent. Hotels increased 19 percent, and the warehouse subcategory grew 18 percent. However, store construction went down 6 percent; and garages and service stations dropped 34 percent. Manufacturing increased 23 percent after a weak August.
Residential construction shed 11 percent, with a total of $236.9 billion worth of projects in September.
Multifamily housing plunged 30 percent, compared to August. There were just two projects valued at $100 million or more that broke ground in September - a $132 million apartment building in New York, N.Y., and a $119 million residential tower in Seattle, Wash.
Single-family housing in September shed 3 percent. Construction of single-family housing declined in all five major regions of the nation, dropping 7 percent in the South Atlantic region. The South-Central and West regions each declined by 1 percent; and the Midwest and Northeast each dropped by 2 percent.
Nonbuilding construction in September increased 5 percent to $133.9 billion, after shedding 12 percent in August.
The electric utility and gas plant category provided much of the fuel, advancing 19 percent. Large electric utility projects reported as September starts included two solar power projects in Utah, valued at $1.2 billion and $729 million, respectively; a $320 million transmission line project in New Jersey; and a $200 million biomass energy plant in Georgia.
The public works category was unchanged. River and harbor development projects climbed 29 percent. The water supply category climbed 12 percent, while highways and bridges improved by 1 percent.
On the down side, the public works category dropped 2 percent, while sewer projects lost 23 percent, after gaining 21 percent in August.
Year-to-date, or January through September, construction starts have increased 12 percent. Residential building has climbed 17 percent, as multifamily housing is up 26 percent, and single-family construction has increased 13 percent.
Nonbuilding construction has jumped 35 percent, with electric utilities and gas plants up 205 percent. Nonresidential building is down 7 percent, due mainly to a 30 percent plunge in the manufacturing category. The commercial building and institutional building groups are essentially unchanged year-to-date.