Written by IAPMO-it 10:11 am Industry News

Despite Hope for Strong Economic Recovery, February Sees Further Decline in National Construction Starts

An increase in nonbuilding construction starts not enough to offset a decline in buildings

NEW JERSEY — March 16, 2021 —  Total construction starts fell 2% in February to a seasonally adjusted annual rate of $797.3 billion. Nonbuilding construction starts posted a solid gain after rebounding from a weak January, however, residential and nonresidential building starts declined, leading to a pullback in overall activity. The Dodge Index fell 2% in February, to 169 (2000=100) from January’s 171.

“With spring just around the corner, hope is building for a strong economic recovery fueled by the growing number of vaccinated Americans,“ said Richard Branch, Chief Economist for Dodge Data & Analytics. “But the construction sector will be hard-pressed to take advantage of this resurgence as rapidly escalating materials prices and a supply overhang across many building sectors weighs on starts through the first half of the year.”

Below is the full breakdown across nonbuilding, nonresidential, and residential construction:

  • Nonbuilding construction starts gained a robust 20% in February to a seasonally adjusted annual rate of $200.3 billion. The miscellaneous nonbuilding sector (largely pipelines and sitework) surged 76%, while environmental public works increased 26%, and highway and bridge starts moved 11% higher. By contrast, utility/gas plant starts lost 17% in February.

For the 12 months ending February 2021, total nonbuilding starts were 13% lower than the 12 months ending February 2020. Highway and bridge starts were 4% higher on a 12-month rolling sum basis, while environmental public works were up 1%. Miscellaneous nonbuilding fell 26% and utility/gas plant starts were down 37% for the 12 months ending February 2021.

The largest nonbuilding projects to break ground in February were the $2.1 billion Line 3 Replacement Program (a 337-mile pipeline in Minnesota), the $1.2 billion Red River Water Supply Project in North Dakota, and the $950 million New England Clean Energy Connect Power Line in Maine.

  • Nonresidential building starts fell 7% in February to a seasonally adjusted annual rate of $208.1 billion. Institutional starts dropped 8% during the month despite a strong pickup in healthcare. Warehouse starts fell back during the month following a robust January, offsetting gains in office and hotel starts, and dragging down the overall commercial sector by 8%.

For the 12 months ending February 2021, nonresidential building starts dropped 28% compared to the 12 months ending February 2020. Commercial starts declined 30%, institutional starts were down 19%, and manufacturing starts slid 58% in the 12 months ending February 2021.

The largest nonresidential building projects to break ground in February were Ohio State University’s $1.2 billion Wexner Inpatient Hospital Tower in Columbus OH, ApiJect Systems’ $785 million Gigafactory in Durham NC, and Sterling EdgeCore’s $450 million data center in Sterling VA.

  • Residential building starts slipped 7% in February to a seasonally adjusted annual rate of $388.9 billion. Both single family and multifamily starts fell during the month, with each losing 7%.

For the 12 months ending February 2021, total residential starts were 4% higher than the 12 months ending February 2020. Single family starts gained 12%, while multifamily starts were down 15% on a 12-month sum basis.

The largest multifamily structures to break ground in February were Bronx Point’s $349 million mixed-use development in The Bronx NY, the $215 million Broadway Block mixed-use building in Long Beach CA, and the $200 million GoBroome mixed-use building in New York NY.

  • Regionally, February’s starts fell lower in the South Central and West regions but moved higher in the Midwest, Northeast, and South Atlantic Regions.

About Dodge Data & Analytics is North America’s leading provider of commercial construction project data, market forecasting & analytics services and workflow integration solutions for the construction industry. Building product manufacturers, architects, engineers, contractors, and service providers leverage Dodge to identify and pursue unseen growth opportunities that help them grow their business. On a local, regional or national level, Dodge empowers its customers to better understand their markets, uncover key relationships, size growth opportunities, and pursue specific sales opportunities with success. The company’s construction project information is the most comprehensive and verified in the industry. Dodge is leveraging its more than 125-year-old legacy of continuous innovation to help the industry meet the building challenges of the future. Learn more at www.construction.com.

Last modified: March 22, 2021