Dodge Data & Analytics says that total construction starts across the US rose 19% in August to a seasonally adjusted annual rate of $793.3 billion. Gains were seen in all three major building sectors: nonresidential building starts rose 16% and residential building climbed 12%, while nonbuilding construction jumped 40% over the month. While large projects certainly influenced the August gains, removing those projects would still have resulted in a gain for the month.
Year-to-date through the first eight months of the year, starts were 14% lower than in the same period in 2019. Nonresidential starts were 24% lower and nonbuilding starts were down 20%, but residential starts were down less than one percent. For the 12 months ending August 2020, total construction starts declined 6% from the 12 months ending August 2019. Nonresidential building starts fell 13% and nonbuilding starts were 9% lower in the 12 months ending August 2020, while residential building starts rose 3%. In August, the Dodge Index rose 19% to 168 (2000=100) from the 141 reading in June. The Dodge Index was down 8% compared to a year earlier and 6% lower than its pre-pandemic level in February.
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Nonbuilding construction posted a 40% gain in August to a seasonally adjusted annual rate of $184.4 billion nearly reversing the sizable decline in the previous month as two large projects pushed activity higher. Starts in the utility/gas plant more than doubled, while environmental public works posted an 89% gain and highway and bridge starts moved up 13%. Miscellaneous nonbuilding starts lost 5%.
The largest nonbuilding project to break ground in August was the $1.3 billion Wastewater Control Plant in San Francisco CA. Also starting during the month were the $888 million Dania Beach Clean Energy Center in Dania Beach FL and the $310 million new Aztec Stadium at San Diego State University in San Diego CA.
Through the first eight months of the year, total nonbuilding starts were down 20% compared to the same period in 2019. Starts in the highway and bridge category were up 1%, while the environmental public works category dropped 15%, the miscellaneous nonbuilding sector fell 34%, and the electric power/gas plant category plunged 45%. On a 12-month rolling basis, total nonbuilding starts were down 9% in the most recent year compared to the 12 months ending August 2019. Starts in the street and bridge category dipped 2%, while starts in the electric power/gas plant category were down 12%. Environmental public works starts pulled back 8% and miscellaneous public works starts dropped 21%.
Nonresidential building starts in August were also aided by large projects in the office and manufacturing sectors leading to an increase of 16% to $236.7 million. Removing these projects, however, would not have prevented an increase in nonresidential building starts. Commercial starts rose 36% and manufacturing starts soared 201%. Institutional starts, however, fell 7% despite small gains in education and healthcare.
The largest nonresidential building project started in August was the $1.0 billion Facebook Data Center (Project Woolhawk) in Gallatin TN. Also starting during the month was the $740 million Texas Instruments Fabrication Plant in Richardson TX and a $700 million mixed-use office and hotel project in Boston MA.
On a year-to-date basis, total nonresidential building starts were 24% lower than in the first eight months of 2019. Institutional building starts dropped 16%, while commercial starts slid 27% and manufacturing starts were 47% lower than a year earlier. Over the 12 months ending August 2020, total nonresidential building starts were down 13% from the 12 months ending in August 2019. Commercial starts were 16% lower, institutional starts were down 13%, and manufacturing starts slipped 1%.
Residential buildings: Through the first eight months of 2020, residential construction starts were down less than one percent versus a year earlier. Single family starts grew 4%, while multifamily starts slid 11%. For the 12 months ending in August 2020, total residential starts gained 3% with single family starts up 6% but multifamily starts down 4%.