ConDig (17-Feb-21).  US construction starts fell 4% in January as a sideways move in nonresidential building was offset by a 10% tumble in nonbuilding and 4% dip in residential starts, according to latest figures from Dodge Data & Analytics. 

The drop took total construction starts to a seasonally adjusted annual rate of $794.3 billion last month.

Nonresidential building starts were unchanged in January at a seasonally adjusted annual rate of $224.5 billion. Commercial starts were 1% higher during the month as a sizeable gain in warehouse construction offset declines elsewhere, Dodge Data reported.

Institutional building starts crumbled 9% in January, with education and healthcare construction down sharply. But manufacturing starts surged 81% due to the start of two large projects.

The largest nonresidential building project to break ground in January was Nucor’s $850 million steel mill in Brandenburg, Kentucky.

For the 12 months ending January 2021, nonresidential building starts tumbled 25% relative to the 12 months ending January 2020. Commercial starts dropped 27%, institutional starts were 15% lower, while manufacturing starts collapsed 59%.

It comes as residential building starts dipped 4% in January to a seasonally adjusted annual rate of $401.4 billion. Multifamily housing starts were 7% lower, while single family dropped 3%.

For the 12 months ending January 2021, total residential starts were 5% higher than the 12 months ending January 2020. Single family starts gained 12%, while multifamily starts slid 12% on a 12-month sum basis.

Nonbuilding constructionstarted the year on a negative note, with a 10% drop in January to a seasonally adjusted annual rate of $168.4 billion. Every nonbuilding sector posted a decline during the month — environmental public works fell 6%, highways and bridges dropped 7%, while starts in the utility/gas plant category lost 13%, and miscellaneous nonbuilding starts plunged 17%.

For the 12 months ending January 2021, total nonbuilding starts were 15% lower than the 12 months ending January 2020. On a 12-month sum basis, street and bridge starts were 5% higher, but environmental public works starts were 3% lower, miscellaneous nonbuilding starts dropped 28%, and utility/gas plant starts lost 40%.

“The tenuous beginning to construction starts in 2021 highlights the long and rocky road ahead for the sector this year”, stated Richard Branch, chief economist for Dodge Data & Analytics. “Over the course of the year the economy will recover as more Americans receive their vaccinations. However, the construction sector’s recovery will take time to materialize due to the deep scars caused to the industry by the pandemic. Patience will be key in the months to come.”