US construction starts nosedive 22% in the first half of 2020

ConDig (22-Jul-20).  US construction starts collapsed 22% in the first half of this year compared with the year-ago period in the wake of the impact of the Covid-19-driven economic shutdown, according to latest figures from Dodge Data & Analytics. 

Total US starts crashed to $88.33 billion for the first half of 2020 compared with $113.79 billion in the same period last year. 

The plunge in starts was driven largely by sharp drops in commercial and multifamily construction during the first half of the year, with only warehouse construction posting a marginal gain. 

Commercial and multifamily construction starts in the top 20 metropolitan areas posted a similar drop of 22% through the first six months of 2020.

In the top 10 metro areas, commercial and multifamily starts crumbled 21% and only one metro area posted an increase. The New York metro area held on to its top spot, despite falling 24% below year-ago levels to $11.5 billion.

Washington DC held to second place even though commercial and multifamily construction starts collapsed 42% to $4.2 billion. The Dallas TX metro area rounded out the top three, with commercial and multifamily activity dropping just 2% to $3.8 billion.

“The COVID-19 pandemic and recession have devastated most local construction markets,” said Richard Branch, chief economist for Dodge Data & Analytics. 

“Across the board, building projects have been halted or delayed with virtually no sector immune from damage. Construction starts have begun to increase from their April lows and there is cautious optimism that as the year progresses construction markets around the country will begin a modest recovery. However, the recent acceleration of COVID-19 cases in the South and West as well as the upcoming expiration of expanded unemployment insurance benefits (from the CARES Act) puts the recovery at significant risk and could undermine the construction sector’s ability to grow.”

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