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News July 21, 2020

June contracts increased 6%

Dodge Data & Analytics, New York, has reported construction starts rose 6% in June. Total construction starts in June were down 2% compared with June 2019.

“Construction starts activity remains significantly weaker than year-ago levels, even though it has been slowly increasing since its nadir in April,” says Richard Branch, chief economist for Dodge Data & Analytics. “May’s gain in starts was fueled by a handful of very large projects, but June’s gain appears to be much more organic in nature. Construction starts should continue to post modest gains in the months to come as the economy continues to recover from the shortest and steepest recession in U.S. history. However, the recent acceleration in new COVID-19 cases in states such as Texas, Florida, and California is a significant downside risk to the economy and the construction industry’s growth trajectory.”

Nonresidential building construction increased 6% in June. Commercial construction starts rose 4% in May; manufacturing starts fell 32%; and institutional starts rose 15%.

Residential building construction fell 6% in June. Single-family housing dropped 7%, and multifamily construction declined 4%.

Nonbuilding construction increased 27% in June with a 108% boost from utility/gas plant construction resulting from the start of more than $2 billion in renewable power projects.

For the 12 months ending in June, nonresidential building was down 7% compared with the 12 months ending June 2019. Residential building was unchanged, and nonbuilding construction rose 3%.

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