March Construction Off A Mere One Percent

April 27, 2016

At a seasonally adjusted annual rate of $660.5 billion, new construction starts in March receded 1 percent from February’s pace, according to Dodge Data & Analytics. Total construction starts had jumped 13 percent in February, led by a huge gain for the electric utility and gas plant category.

If the volatile electric utility and gas plant category is excluded, total construction starts on a seasonally adjusted basis in March would be up 4 percent from February, while the year-to-date comparison on an unadjusted basis would show just a modest 4 percent decline.

“While March construction activity was down slightly from February, it stayed above the lackluster performance witnessed during the second half of last year that continued through January,” stated Robert A. Murray, chief economist for Dodge Data & Analytics.

Nonresidential building in March climbed 23 percent to $228.1 billion (annual rate), strengthening for the second month in a row after February’s 5 percent gain.

The institutional building group in March soared 44 percent, with most of the structure types reporting growth.

The transportation terminal category up 339 percent as it was lifted by the start of two very large projects – $663 million for work on the rail terminal caverns at Grand Central Station in New York NY and $537 million for the new North Terminal building at Louis Armstrong International Airport in New Orleans LA.

Hotel construction rose 47 percent.

Residential building, at $292.0 billion (annual rate), grew 3 percent in March. Multifamily housing increased 15 percent, bouncing back following a 6 percent decline in February, as it continues to proceed at a brisk pace.

The electric utility and gas plant category retreated 38 percent from its exceptional February amount, which included the $3 billion third segment (or train) of an LNG export terminal in Freeport TX as well as the start of several very large power plants.

By geography, the twelve months ending March 2016 revealed this pattern for total construction starts – the Northeast, up 14 percent; the Midwest and West, each up 4 percent; the South Atlantic, up 1 percent; and the South Central, down 14 percent.

For more information and analysis, read the Dodge Data & Analytics press release here: