Dodge Data & Analytics, New York, has reported construction starts decreased 2 percent in January. Total construction starts in January were down 7 percent compared with January 2017.
"Although the expansion for the construction industry lost some momentum during 2017, on a broad level it can be characterized as deceleration as opposed to decline," says Robert A. Murray, chief economist for Dodge Data & Analytics. "January's level of activity, which held close to last year's mid-range, is consistent with the picture of a decelerating expansion. The factors affecting construction activity going forward in 2018 have become more varied. Some dampening may come from higher material prices and tight labor markets, yet while interest rates are rising the increases are expected to stay moderate this year. The tax reform legislation is anticipated to lift economic growth in the near term, which may benefit commercial building and manufacturing construction starts. The Trump administration has provided the outline of an infrastructure program, but the details need to be worked out by Congress against the backdrop of a growing federal budget deficit, which may limit any benefit this year for public works. One plus for 2018 is that the institutional side of nonresidential building should stay close to last year's elevated pace."
Nonresidential building construction rose 1 percent in January. In the commercial category, manufacturing plant construction surged 99 percent; warehouse construction was unchanged; store construction dropped 2 percent; hotel construction decreased 13 percent; and office construction fell 31 percent. In the institutional category, amusement-related construction soared 149 percent; educational building construction slipped 1 percent; transportation terminal construction dropped 6 percent; health care facility construction declined 10 percent; churches decreased 23 percent; and public buildings fell 25 percent.
Residential building construction rose 7 percent in January. Single-family housing fell 3 percent, and multifamily construction jumped 39 percent.
Nonbuilding construction decreased 18 percent in January.
During the first month of 2018, nonresidential building was down 20 percent compared with the same time period in 2017. Residential building increased 1 percent, and nonbuilding construction increased 4 percent. By geographic region, the Midwest rose 42 percent; South Atlantic was unchanged; South Central decreased 9 percent; West dropped 10 percent; and Northeast fell 36 percent.