Dodge Data & Analytics, New York, has reported construction starts climbed 6% in August after rising 17% in July.
Nonresidential building construction surged 40% in August as manufacturing starts jumped 285%. Commercial starts rose 8% and institutional starts climbed 35%.
Residential building construction fell 1% in August. Single-family housing climbed 2%, and multifamily starts declined 5%.
Nonbuilding construction declined 14% in August.
“Despite the August gain, the construction sector is running uphill,” said Richard Branch, chief economist for Dodge Construction Network. “Fear of an imminent recession seems to have abated, which should provide a boost of confidence to the sector. However, higher interest rates, labor shortages and significantly tighter lending standards will weigh down starts in the final quarter of the year. This will persist for the foreseeable future, lasting until interest rates start to move lower.”
For the 12 months ending August 2023, total construction starts were unchanged compared with the 12 months ending August 2022. Nonresidential building rose 6%; nonbuilding construction grew 20%; and residential building dropped 17%.