Dodge Data & Analytics, New York, has reported construction starts decreased 13 percent in April. Total construction starts in April were down 7 percent compared with April 2017.
"The construction start statistics can be volatile on a monthly basis, and given the wide swings present in March and April, it's probably best to take the average of the two months in assessing the current health of the construction industry," says Robert A. Murray, chief economist for Dodge Data & Analytics. "The average for March and April shows that construction starts so far in 2018 are proceeding slightly behind last year's average pace. Even with this modest slowdown in early 2018, there are several factors in the current environment that should help construction activity to stay close to recent levels.
"Job growth continues to be strong, with the unemployment rate at the lowest level since 2000, which should limit any upward movement by commercial vacancy rates this year," Murray continues. "In its latest quarterly survey of bank lending standards, the Federal Reserve indicated that lending standards for nonresidential building projects eased slightly on net during the first quarter of 2018, following the tightening that took place from late 2015 through 2017. In March, Congress reached agreement on fiscal 2018 appropriations, providing additional funding for several public works programs. And, while interest rates are rising, the upward movement so far has been measured, with the 10-year Treasury bill stabilizing at about 3 percent from March through mid-May."
Nonresidential building construction fell 12 percent in April. In the commercial category, hotel construction rose 25 percent; store construction advanced 21 percent; office construction grew 18 percent; and warehouse construction fell 11 percent. In the institutional category, public buildings grew 34 percent; churches increased 26 percent; amusement-related construction rose 3 percent; educational building construction fell 13 percent; transportation terminal construction declined 16 percent; health care facility construction dropped 27 percent; and manufacturing plant construction plunged 59 percent.
Residential building construction fell 9 percent in April. Single-family housing dropped 4 percent, and multifamily construction decreased 20 percent.
Nonbuilding construction decreased 22 percent in April.
During the first four months of 2018, nonresidential building was down 18 percent compared with the same time period in 2017. Residential building increased 4 percent, and nonbuilding construction decreased 10 percent. By geographic region, the South Atlantic dropped 1 percent; South Central decreased 5 percent; Northeast dropped 8 percent; West declined 11 percent; and Midwest fell 13 percent.
