New construction starts in November fell 5 percent, compared to October, to an annual rate of $563.3 billion, Dodge Data and Analytics said.
Year to date, however, total construction starts have increased 8 percent to $597.9 billion, compared to the same 11-month period in 2014.
Both residential and nonresidential construction fell in November on a month-over-month basis, while the nonbuilding category was relatively unchanged.
“The pattern of construction starts on a month-to-month basis is rarely smooth, and on balance October and November do show improvement after the subdued activity in late summer,” said Robert A. Murray, chief economist for Dodge Data and Analytics.
“The construction expansion, while often hesitant, should be able to continue in coming months as the result of several factors,” Murray said. “Market fundamentals for commercial real estate, namely occupancies and rents, continue to strengthen. More construction bond measures are getting passed at the state and local levels of government, particularly for school construction. A new five-year federal transportation bill was enacted in early December, and it’s estimated that federal financing support for highway and bridge construction will be up 5 percent next year.”
Nonresidential building in November dropped 13 percent to $175.4 billion, after jumping 33 percent in October. Most nonresidential subcategories fell as well. Commercial projects declined 29 percent in November after soaring 53 percent in October. Office construction plunged 43 percent. Store construction fell 30 percent in November, while hotels stayed even with its October pace. Manufacturing improved, however, rising 38 percent for the month.
Institutional, another nonresidential subgroup, receded a slight 1 percent after expanding 23 percent in October. Amusement-recreation work was down 12 percent. Transportation terminals dropped 19 percent; religious buildings fell 4 percent. Educational facilities rose 3 percent, and health care edged up 1 percent.
Residential building in November decreased 2 percent to $257.4 billion, and multifamily housing retreated 6 percent after soaring 43 percent in October. Single-family housing was unchanged from its October pace.
Nonbuilding construction in November was reported at $130.5 billion, essentially unchanged from October. Public works categories, as a group, increased 17 percent in November. Miscellaneous public works, which includes such projects as mass transit and pipelines, surged 93 percent. Highway and bridge construction climbed 16 percent. Environmental public works were mixed, with a 15 percent increase in river-harbor development, while water supply construction dropped 31 percent, and sewer construction declined
Dodge Data and Analytics:
Nonresidential Starts Drop 2.5 Percent
Construction starts in November totaled $24 billion, a drop of 2.5 percent compared to October, but
remain 1.6 percent higher on a year-over-year basis, Construction Market Data Group said in its latest monthly report.
CMD’s analysis excludes residential building. On a month-over-month basis, commercial projects expanded by 3.7 percent, and the institutional group climbed by 3.6 percent. However, heavy engineering dropped 10.4 percent, driving the total value of starts down in November. This happened even with a 29.6 percent jump upward by the industrial group.
Year-over-year, commercial gained 15.4 percent; heavy engineering climbed 5.5 percent; and institutional increased 3.9 percent. But industrial plummeted 90.2 percent.
Total employment in the construction industry improved by 46,000 jobs in November, compared to October. This was the best monthly gain since 69,000 jobs were added in January 2015. Year-over-year, the jobs front gained 4.2 percent, the fastest hiring pace of all major construction categories.
Construction Market Data Group: