According to the latest report from Dodge Data & Analytics, total construction fell 7% from June to July to a seasonally-adjusted rate of $631.6 billion. However, the only real loss in the three segments that Dodge covers was in non-building, which lost a whopping 31%, while non-residential building starts increased 3% and residential building starts increased 2%.
Year-to-date through the first seven months of the year, starts were down 15% from the same period of 2019. During that same time frame, non-residential starts dropped 25%, non-building starts dropped 20% and residential starts slipped 4%.
For the twelve months ending July 2020, total construction starts dropped a more modest 5%, while non-residential building starts dropped 11%, residential starts increased 1% and non-building starts fell 7%.
This past month, the gain in non-residential building starts occurred almost exclusively in the Northeast and West regions, with starts in the South Atlantic and South-Central regions down sharply during that same time period.
Richard Branch, chief economist for Dodge Data & Analytics, said, “While one month doesn’t constitute a trend, the potential risk to construction from the rising number of COVID cases in these regions is significant.”
Branch added that the July decline in construction starts should not be interpreted as a setback on the sector’s road to recovery.
“The gains in the nonresidential and residential sectors mirror the general overall improvement in the economy,” he said. “The drop in public works could represent a settling back in activity following a solid spring in which some projects broke ground earlier than expected to take advantage of the fewer cars on the road during the COVID-19 shutdown in March and April.”
He then added that, while the recovery progresses, the Congressional impasse preventing the extension of enhanced unemployment insurance benefits and small business loans included in earlier fiscal support packages casts a pallor over the future trajectory for growth.