Reed Construction Data (RCD) announced that construction starts in September, excluding residential contracts, were 39% below August starts and 28% below last September. However, the year-to-date value of construction starts through September, excluding residential contracts, totaled $193.4 billion, almost exactly the same as in the first three quarters of 2009.
September is a seasonally normal month for construction starts so the seasonally adjusted monthly drop from August was about 25%. September starts were only marginally higher than in June 2009, the low point for starts in this building cycle.
The value of construction starts each month is summarized from RCD’s database of all active construction projects in the United States, excluding single-family homes. Missing project values are estimated using RSMeans’ building cost models.
The September starts drop more than offsets the (revised) 20% starts gain in August. Some of the September decline is due to concern about the summer slowdown in the economy but most of it is probably due to random measurement error. Preliminary data suggest that a similar huge decline did not occur in September residential starts.
The largest September versus August declines were for highways and bridges (-$2.8 billion), education (-$2.1 billion) and water, sewer and civil projects (-$1.5 billion). Government office starts also fell significantly (-$0.5 billion). Developer-financed starts fell $1.4 billion in September. But except for the small hotel market, the monthly decline was mostly seasonal or the reversal of large August gains. Read More.