Multifamily Housing Construction Starts Decrease in September According to Latest Dodge Data Report

Multifamily Housing Construction Starts Decrease in September According to Latest Dodge Data Report

NEW YORK, NY - New construction starts moved 5% lower in September to a seasonally adjusted annual rate of $774.1 billion, according to Dodge Data & Analytics. This marks the second consecutive monthly decline in construction starts. By major sector, nonbuilding construction fell 13% in September, while residential construction dropped 6%. On the plus side, nonresidential construction starts rose 1% during the month aided by the start of a large manufacturing project.

The September statistics pushed the Dodge Index lower to 164 (2000=100) compared to 173 in August, marking the lowest reading for the Index since May. Despite the month’s decline, the Index remains close to its 2019 average of 167.

Through the first nine months of 2019, total construction starts were 3% lower than 2018 due to pullbacks in both residential and nonresidential construction starts. However, nonbuilding construction starts are 4% higher year-to-date as a result of strong gains in electric utilities/gas plants.

“Large projects continue to make their presence felt in the monthly statistics, sometimes obscuring underlying trends,” stated Richard Branch, Chief Economist for Dodge Data & Analytics. “Nevertheless, construction starts have certainly throttled back in 2019 due to mounting uncertainty over the country’s economic health.”

Nonbuilding construction totaled $187.0 billion (at a seasonally adjusted annual rate) in September, a 13% drop from the previous month. Starts in the miscellaneous nonbuilding category declined 32% from August to September, while highway and bridge starts fell 12%, and electric utility/gas plant starts lost 10% over the month. On the plus side, environmental public works (drinking water, sewers, hazardous waste, and other water resource projects) increased 12% in September.

The largest nonbuilding construction project to get underway in September was the $994 million Cotton Belt “Silver Line” Rail Corridor, a 26-mile rail line extending from Dallas-Fort Worth Airport in Dallas TX to Shiloh Road in Plano TX. Also starting in September was the $720 million (480 MW) Maverick Creek Wind Farm near Eden TX and a $629 million reconstruction of a 5.5 mile stretch of I-75 in Troy MI.

Through the first nine months of 2019, nonbuilding construction was 4% higher than in the same period of 2018 at $151.3 billion. Starts for electric utilities/gas plants were 132% higher year-to-date and environmental public works were up 2%. Miscellaneous nonbuilding starts, however, were 24% lower through nine months and highways and bridges were down 7%.

Nonresidential building starts inched 1% higher in September to $287 billion (at a seasonally adjusted annual rate). The increase was a result of a 243% increase in manufacturing construction due to the start of a large automotive plant. Commercial construction starts fell 14% over the month as the office sector pulled back from a very strong level of activity during the prior month. Institutional construction starts fell 1%.

The largest nonresidential building project to break ground in September was a $969 million consolidated rental car facility at Los Angeles International Airport in Los Angeles CA. Also getting under way was the $900 million Fiat Chrysler Assembly complex in Detroit MI and the $750 million Exxon Polypropylene Production plant in Baton Rouge LA.

Year-to-date through September, nonresidential building starts totaled $215.0 billion, a 4% decline from the first nine months of 2018. Commercial starts were 6% higher pushed forward by the office, warehouse, and parking categories. Institutional construction starts were down 3% through nine months, with all major categories posting setbacks. Manufacturing starts were a sharp 39% lower year-to-date.

Residential building fell 6% in September to $300.0 billion at a seasonally adjusted annual rate. Both single family and multifamily starts fell 6% from August to September. The largest multifamily construction project to get underway in September was the $228 million Lakeshore East – Cirrus Apartment Tower in Chicago IL. Also breaking ground during the month was the $192 million Greenpoint Landing in Brooklyn NY and the $150 million The Eleven Condo project in Minneapolis MN.

Through the first nine months of the year, residential construction starts were 6% lower than in the same period of 2018 at $238.3 billion. Single family starts were down 4%, while multifamily declined 11% year-to-date.

Source: Dodge Data & Analytics / #Multifamily #Construction

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