US construction starts fall back 24.8% after summer ‘pop’ in activity

Image: Dodge Construction Network

Figures from Dodge Construction Network showed non-residential building starts dropped 32%, nonbuilding starts declined 26.7% and residential starts fell 5.2%.

“After a pop in activity last month, construction starts largely normalized throughout August,” said Sarah Martin, director of economic research at Dodge Construction Network.

Despite the monthly decline, total starts remained 15.2% higher in the year to August. Non-residential and nonbuilding starts rose 23.4% and 22.2%, respectively, while residential starts slipped 1.8%.

“Abstracting from the month-to-month volatility, the story remains consistent. Data centre, semiconductor and energy construction are driving growth, while several other sectors are facing subdued activity alongside deeper labour shortages, and accelerating material prices,” Martin added.

Manufacturing starts fell 80.8% month on month following July’s major project starts. Ffice and data centres were down 31.3%, parking garages dropped 24.9%, and warehouses fell 13.4%. But hotel construction more than tripled (+302.2%) after a weak July.

In non-building construction, highway and bridge starts dropped 20.8%.

In residential, single-family starts remained flat, growing 0.4% month on month, while multifamily housing starts declined 13.5%.

Major projects breaking ground during August included the US$3.5 billion Amazon STACK Blanchard State Line data centre in Louisiana, the $2.9 billion Bronx Detention Facility in Mott Haven, New York, and the US$3.5 billion Steel River Energy Center (phases 1 and 2) in Arkansas.