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Total Construction Starts Down for Month

Nonresidential Sector Up Though

The largest multifamily construction projects to break ground in September were the $228 million Lakeshore East - Cirrus Apartment Tower in Chicago, the $192 million Greenpoint Landing in Brooklyn and the $150 million The Eleven Condo project in Minneapolis.

Total construction starts for the month fell 5% lower making it the second consecutive monthly decline. According to Dodge Data & Analytics, nonbuilding construction was off 13% while residential construction dropped 6%. However, the nonresidential sector construction improved 1% during aided by the start of a large manufacturing project. 

These new statistics pushed the Dodge Index down to 164, hitting its lowest reading since May.  Despite the month's decline, the Index remains close to its 2019 average of 167.

Adding up the first nine months of 2019, total construction starts were 3% lower than the same time period last year as both residential and nonresidential starts lost ground while the nonbuilding sector posted a 4% gain year-to-date.

"Large projects continue to make their presence felt in the monthly statistics, sometimes obscuring underlying trends," stated Richard Branch, chief economist for Dodge Data & Analytics. "Nevertheless, construction starts have certainly throttled back in 2019 due to mounting uncertainty over the country's economic health."

Broken down by category month-to-month, in the nonbuilding sector, starts in the miscellaneous category declined 32%, highway and bridge starts fell 12%, and electric utility/gas plant starts lost 10%. In positive news, environmental public works (drinking water, sewers, hazardous waste, and other water resource projects) increased 12% in September. 

Through the first nine months of 2019, total nonbuilding construction was 4% higher than in the same period of 2018.

In the nonresidential building sector, there was a monthly increase of a 243% in the manufacturing category due to the start of a large automotive plant. The commercial category was off 14% as office construction starts faltered. The institutional category slipped 1%. 

Year-to-date, nonresidential building starts decreased 4% decline from the first nine months of 2018.

In the residential sector, both single family and multifamily starts fell 6% month-to-month. Through the first nine months of the year, single family starts were down 4%, while multifamily declined 11%.


January 18, 2020, 5:38 am PDT

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