The value of new construction starts in July advanced 6% from the previous month to a seasonally adjusted annual rate of $728.1 billion, it was reported by Dodge Data & Analytics Monday. Single family was flat.
July’s data lifted the Dodge Index to 154 (2000=100), compared to an upwardly revised 145 for June. After this year’s strong first quarter, the Dodge Index had receded 11% in the second quarter. July’s total construction gain brings activity back to within 2% of the first quarter’s pace.
Single-family housing in July was flat with the previous month, not yet showing renewed growth after settling back 4% in the second quarter following its first quarter 6% gain. By geography, single family housing in July performed as follows relative to June – the Northeast, up 3%; the South Central, up 2%; the South Atlantic, up 1%; the West, unchanged; and the Midwest, down 3%.
Leading the way was a 26% jump by the non-building construction sector, which reflected an improved level for public works and the start of two massive power plants, located respectively in California and New York.
Residential building in July increased 8%, as multifamily housing rebounded after three consecutive monthly declines. Multifamily housing increased 30%, strengthening after three monthly declines in a row. There were 9 multifamily projects valued at $100 million or more that reached groundbreaking in July, led by the $360 million Wolf Point East apartment tower in Chicago IL, the $225 million multifamily portion of the $280 million mixed-use redevelopment of the Domino sugar factory in Brooklyn NY, and a $225 million condominium tower in Honolulu HI. In July, the top five metropolitan areas in terms of the dollar amount of multifamily starts were – New York NY, Chicago IL, Los Angeles CA, Boston MA, and Atlanta GA. Through the first seven months of 2017, the top five metropolitan areas, with their percent change from a year ago, were – New York NY, down 20%; Los Angeles CA, up 16%; Chicago IL, down 2%; San Francisco CA, up 27%; and Washington DC, up 6%.
Running counter was a 7% slide for nonresidential building following its 14% hike in June, as both office buildings and hotels retreated from June’s elevated activity, outweighing a sharp rise for healthcare facilities in July. During the first seven months of 2017, total construction starts on an unadjusted basis were $411.9 billion, down 1% from the same period a year ago. Dampening the year-to-date performance for total construction was a steep 44% decline for the electric utility/gas plant category, even with the two massive power plants reported as July starts. If the electric utility/gas plant category is excluded, total construction starts in this year’s January-July period would be up 3% from a year ago.
