Dodge Data & Analytics, New York, has reported construction starts climbed 8% after falling 4% in April.
Nonresidential building construction rose 8% in May as manufacturing starts more than doubled. Commercial starts decreased 20% and institutional starts fell 1%.
Residential building construction fell 4% in May. Single-family housing dropped 2%, and multifamily starts declined 8%.
Nonbuilding construction rose 24% in May.
“May’s data is another sign that the construction sector is slowly splitting in two,” said Richard Branch, chief economist for Dodge Construction Network. “Public dollars are flooding into the manufacturing and infrastructure sectors, leading to significant growth over the last year. Meanwhile, the mostly private sectors of the building market like offices, multifamily and retail are struggling under the weight of higher interest rates, tightening lending standards and declining demand. The second half of the year is shaping up to be a challenging one. But the insulation provided by manufacturing and infrastructure starts will stabilize the industry and lead to modest overall growth.”
For the 12 months ending May 2023, total construction starts were up 9% compared with the 12 months ending May 2022. Nonresidential building rose 26%; nonbuilding construction grew 30%; and residential building dropped 15%.
