November Is a Mixed Month for Construction Starts

Published On
Jan 4, 2021

According to a report from Dodge Data & Analytics, Hamilton, N.J., total construction starts fell 2% in November 2020 to a seasonally-adjusted rate of $797.5 billion, following a strong gain in October.

While nonbuilding starts dropped 14% and residential starts dropped 7%, nonresidential building construction starts increased 19%. In terms of region, overall construction starts dropped in the South Atlantic, Northeast and West, but rose in the Midwest and South Central United States.

“November construction starts were somewhat of a mixed bag,” said Richard Branch, chief economist for Dodge Data & Analytics. “On the positive side, the gain in nonresidential building starts shows that the recovery from the early months of the pandemic remains on course.” He added that, “[D]espite the November decline in single family starts, tremendous positive momentum remains in the housing sector.”

However, he noted that there remains significant concern about the ability of construction starts to maintain their current pace in the face of rising COVID-19 cases, as well as the uncertain outlook for additional federal stimulus.

“While the near term outlook for starts remains cloudy, the recent deployment of a vaccine in the U.S. raises hope and expectation that 2021 will be a better year,” Branch said.

Year-to-date through the first 11 months, total construction starts were down 12% from the same period in 2019. Nonresidential starts were 25% lower, while nonbuilding starts were down 16%. Residential starts, however, were a total of 3% higher.

And, in November, the Dodge Index fell 2% to 169 from a 173 October high. (Those numbers are based on a beginning number of 100 in the year 2000.) In addition, the Dodge Index was down 24% from a year earlier and 6% lower than its pre-pandemic level in February 2020.

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