Dodge Data & Analytics, New York, has reported construction starts increased 12 percent in December 2017. Total construction starts for 2017 were up 3 percent compared with 2016.
"After weaker activity was reported in October and November, the December rebound for total construction starts eased the extent of the decline that took place during the fourth quarter," says Robert A. Murray, chief economist for Dodge Data & Analytics. "On a quarterly basis, growth in 2017 was reported during the first and third quarters, while activity retreated during the second and fourth quarters, continuing the up-and-down pattern around an upward trend that was present during 2016. On the positive side for 2017, institutional building assumed a leading role in keeping the nonresidential building expansion going, reflecting elevated activity for transportation terminal starts and further improvement by educational facilities. Manufacturing plant construction starts strengthened, ending a two-year decline, and commercial building was able to stay close to its heightened 2016 amount. Residential building in 2017 showed more growth for single-family housing, offsetting a downturn for multifamily housing. And, public works construction in 2017 was able to strengthen, helped by the start of several very large pipeline projects and a moderate gain for highway and bridge construction.
"The construction industry over the past two years has made the transition to a more mature stage of expansion, characterized by slower rates of growth for total construction compared to the 11 percent to 13 percent yearly gains during the 2012-2015 period," Murray continues. "For 2018, the construction expansion is anticipated to continue at a modest pace. The tax reform package is expected to provide a near term lift to overall economic growth, and the likely beneficiaries would be commercial building and multifamily housing. Funding support for institutional building will come from the state and local bond measures passed in recent years. Passage of a new infrastructure program at the federal level could be a plus for public works, although the impact at the construction site is likely to be felt more in 2019 than in 2018, as the program would feature incentives to boost funding from state, local, and private sources."
Nonresidential building construction rose 10 percent in December 2017. In the commercial category, office construction climbed 42 percent; warehouse construction grew 12 percent; hotel construction increased 5 percent; store construction dropped 2 percent; and manufacturing plant construction declined 37 percent. In the institutional category, public buildings soared 89 percent; transportation terminal construction surged 42 percent; health care facility construction grew 29 percent; churches rose 4 percent; amusement-related construction increased 3 percent; and educational building construction fell 7 percent.
Residential building construction rose 1 percent in December 2017. Single-family housing rose 1 percent, and multifamily construction was unchanged.
Nonbuilding construction increased 43 percent in December 2017.
During 2017, nonresidential building was up 7 percent compared with the same time period in 2016. Residential building increased 2 percent, and nonbuilding construction decreased 2 percent. By geographic region, the Northeast rose 17 percent; South Atlantic increased 6 percent; West climbed 3 percent; South Central dropped 3 percent; and Midwest fell 8 percent.
