March contracts increased 16%

April 22, 2019

Dodge Data & Analytics, New York, has reported construction starts increased 16% in March. Total construction starts in March were down 10% compared with March 2018.

"The month-to-month pattern for construction starts is often affected by the presence or absence of very large projects, and March certainly benefitted from groundbreaking for a number of very large projects," says Robert A. Murray, chief economist for Dodge Data & Analytics. "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. It's still expected that the overall dollar amount for construction starts for 2019 will be able to stay close to what was reported for 2018.

"On the plus side, the passage of federal appropriations for fiscal year 2019 in mid-February seems to be helping the public works sector," Murray continues. "The electric utility and gas plant category has shown surprising strength during early 2019, following the steep declines over the previous three years. 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."

Nonresidential building construction increased 24% in March. In the commercial category, manufacturing plant construction surged 108%; hotel construction rose 60%; office construction grew 45%; store construction climbed 11%; and warehouse construction fell 29%. In the institutional category, amusement-related construction jumped 90%; public buildings surged 48%; churches grew 7%; educational building construction increased 6%; health care facility construction rose 2%; and transportation terminal construction declined 22%.

Residential building construction fell 3% in March. Single-family housing rose 1%, and multifamily construction fell 12%.

Nonbuilding construction increased 40% in March.

During the first three months of 2019, nonresidential building was down 5% compared with the same time period in 2018. Residential building decreased 15%, and nonbuilding construction dropped 6%. By geographic region, the South Central increased 2%; Northeast dropped 6%; West declined 12%; South Atlantic fell 12%; and Midwest declined 24%.