Despite predictions by industry experts for weakening construction starts in late 2019 and into 2020, construction starts are actually continuing to increase.
According to the latest report from Dodge Data & Analytics, construction starts rose 37% from October to November, reaching a seasonally adjusted annual rate of $988.9 billion, and pushing the Dodge Index to 209 (with 100 set as the starting index in 2000).
Nonresidential building starts overall gained 61% over the month to a seasonally adjusted rate of $366.5 billion. Construction starts for the month grew in manufacturing (+782%), institutional (+27%) and commercial (+23%). Hotels and healthcare were the only two categories within the sector that fell in November.
Though nonresidential construction starts were generally positive from October to November, nonresidential building construction starts for the first 11 months of 2019 was not as positive when compared with the same period in 2018, falling 3% overall.
Nonbuilding starts gained 82% over the month, to a seasonally adjusted rate of $288.5 billion. Within the sector, electric utility/gas plant projects led the way as a result of several very large projects. Construction starts grew in environmental public works starts (+51%), highway and bridge (+18%) and miscellaneous nonbuilding (+33%).
Through the first 11 months of 2019, nonbuilding construction was 6% higher than the same period of 2018. Electric utility/gas plant projects, in specific, were 111% higher than a year earlier.
Residential building starts were essentially flat for the month, with a seasonally adjusted rate of $333.9 billion. While multifamily starts gained 20%, single family starts dropped 8%.
Through the first 11 months of 2019, total residential starts declined 4% over the same period in 2018.
“The presence or absence of large projects continues to add immense volatility to the monthly data,” said Richard Branch, Dodge’s chief economist. “However, the underlying trend for the year remains intact—that construction starts are settling back following nine consistent years of growth.”