According to the latest report from Dodge Data & Analytics, total new construction starts for March advanced a surprising 16 percent from February, to a seasonally adjusted annual rate of $809.2 billion.
"The substantial gain followed a lackluster performance during the first two months of 2019, as total construction starts in March were able to climb back to a level slightly above the average monthly pace during 2018," the report states.
The March data produced a reading of 171 for the Dodge Index (the base reading being 100), up from 148 in February and 1 percent higher than the full-year 2018 average of 170.
Leading the increase in February was the nonbuilding construction sector, comprised of public works and electric utilities/gas plants, which increased a whopping 40 percent in March.
The nonresidential building sector increased an impressive 24 percent in March, aided by groundbreaking for several large projects.
However, the residential building sector slipped 3 percent in March, as multifamily housing retreated for the second consecutive month.
On a 12-month, moving total basis, according to the report, total construction starts for the 12 months ending March 2019 essentially matched the corresponding amount for the 12 months ending March 2018.
"It remains true that the construction expansion is decelerating, but the March upturn indicates that the loss of momentum won't be as pronounced as suggested by the subdued activity in January and February," said Robert A. Murray, chief economist for Dodge Data & Analytics. "It's still expected that the overall dollar amount for construction starts in 2019 will be able to stay close to what was reported for 2018."
Murray added, "The commercial building segment is supported by market fundamentals that have yet to erode, while the institutional building segment continues to move at a good clip. The areas of concern in the near term relate to residential building, with single family housing not able to strengthen due to affordability constraints, while multifamily housing seems to be pulling back from its strong 2018 pace."