Construction starts dip 9% in October as residential and nonresidential projects slow

ConDig (21-Nov-17). U.S. construction starts fell 9% in October to a seasonally adjusted annual rate of $742.9 billion, down from $814.8 billion in September, as residential and nonresidential projects eased, according latest figures from Dodge Data & Analytics.

Construction starts in the nonresidential building sector nosedived 30% last month after surging 37% in September. It comes as September included three major projects — the $6 billion ethane cracker plant in Pennsylvania, $4 billion Delta Airlines terminal facility at LaGuardia Airport in New York and the $1.7 billion 50 Hudson Yards office tower in New York NY.

October did, however, include the start of several large projects, led by the $1.1 billion new ballpark for the Texas Rangers in Arlington, Texas.

Residential building in October dipped 1% due to a slower pace for multifamily housing, which declined 3%.

Despite the falls in residential and nonresidential, the nonbuilding construction sector saw a 27% increase compared with September as the start of a $3 billion expansion of the Atlantic Sunrise natural gas pipeline in Pennsylvania and Virginia helped lift results.

“The pace for nonresidential building in September was unsustainably high, so October’s decline was expected. Nonresidential building is still on track to show moderate growth for 2017 as a whole, helping to keep the expansion for overall construction activity going,” said Robert A. Murray, chief economist for Dodge Data & Analytics.

“On the residential side, multifamily housing is retreating from a very strong 2016, but to this point the retreat has been modest. And, the downward pull coming from nonbuilding construction appears to be easing, given the ongoing strength shown by pipeline projects and some recent improvement by highways, bridges, and mass transit.”

For the first ten months of this year, total construction starts on an unadjusted basis are up 1% on the same period last year to $631.2 billion. It comes despite a 38% drop in the electric utility/gas plant category.