The value of new construction starts in January increased 12 percent to a seasonally adjusted annual rate of $690.2 billion, according to Dodge Data & Analytics.

After easing back during last year’s fourth quarter, residential building edged upward in January as the result of a slight gain for single-family housing. Nonresidential building strengthened in January.

On an unadjusted basis, total construction starts in January were reported at $48.5 billion, down 3 percent from the same month a year ago, which included strong amounts for the volatile manufacturing plant and electric utility/gas plant categories. If manufacturing plants and electric utilities/gas plants are excluded, total construction starts in January would be up 10 percent from last year.

The January statistics raised the Dodge Index to 146, compared to 130 in December.

“The 12-percent gain for total construction starts in January gets 2017 off to a healthy beginning, following the declines reported toward the end of 2016,” says Dodge chief economist Robert A. Murray. “What’s noteworthy about January’s rebound is that the institutional side of the nonresidential building market, led by airport terminal work, has assumed a more substantial role in keeping the expansion going.

“The institutional side of nonresidential building has typically lagged the pattern shown by commercial building, and its continued growth is needed for overall nonresidential building to advance further in 2017. While commercial building is also expected to see growth in 2017, its rate of increase will be restrained as vacancy rates level off and banks in the near term maintain a cautious stance toward commercial real estate loans pending any changes to the Dodd-Frank regulations.”

Residential building in January increased 1 percent to $307.6 billion (annual rate), maintaining the improved level achieved in December with an 8-percent gain. Single-family housing in January grew 1 percent, while multifamily housing in January held steady with its December amount. Thirteen multifamily projects valued at $100 million or more reached groundbreaking in January, similar to the 14 such projects in December.

Nonresidential building in January climbed 16 percent to $261.5 billion (annual rate), following lackluster activity in December. The $3.4 billion Central Terminal Building project start at LaGuardia Airport provided much of the upward push, supporting a 37-percent gain for the institutional categories as a group and a 768-percent hike for the transportation terminal category. Also advancing in January were healthcare facilities, rising 6 percent, and public buildings, up 1 percent. January declines were reported for educational facilities, down 18 percent; amusement, down 36 percent; and religious buildings, down 44 percent.

The commercial side of the nonresidential building market grew 12 percent in January. Office construction starts climbed 26 percent, and hotel construction in January rose 5 percent. Store construction declined 1 percent.

For the 12 months ending January 2017, total construction starts were up 1 percent. By major sector, nonresidential building grew 5 percent, with commercial building up 12 percent, institutional building up 10 percent and manufacturing building down 36 percent.  Residential building also grew 5 percent, with single-family housing up 8 percent and multifamily housing down 1 percent.

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