Dodge Data & Analytics, New York, has reported construction starts fell 7% in July. Total construction starts in July were down 5% compared with July 2019.
“The July decline in construction starts should not be interpreted as a setback on the sector’s road to recovery,” says Richard Branch, chief economist for Dodge Data & Analytics. “The gains in the nonresidential and residential sectors mirror the general overall improvements in the economy. The drop in public works could represent a settling back in activity following a solid spring in which some projects broke ground earlier than expected to take advantage of the fewer cars on the road during the COVID-19 shutdown in March and April.
“While the recovery progresses, the congressional impasse preventing the extension of enhanced unemployment insurance benefits and small business loans included in earlier fiscal support packages casts a pallor over the future trajectory for growth,” Branch continues. “Furthermore, the gain in nonresidential building starts was entirely due to strength in the Northeast and West regions, with starts in the South Atlantic and South Central regions down sharply during the month. While one month doesn’t constitute a trend, the potential risk to construction from the rising number of COVID cases in these regions is significant.”
Nonresidential building construction increased 3% in July. Commercial construction starts rose 13% in July, with gains in hotels, warehouses and office buildings; institutional starts rose 2%; and manufacturing starts fell 52%.
Residential building construction rose 2% in July. Single-family housing dropped less than 1%, and multifamily construction increased 11%.
Nonbuilding construction decreased 31% in July as all categories within nonbuilding dropped, including utilities/gas plants, which fell 58% following a large gain in June.
For the 12 months ending in July, nonresidential building was down 11% compared with the 12 months ending July 2019. Residential building rose 1%, and nonbuilding construction fell 7%.
