HAMILTON, NJ – Total construction starts declined 5% from February to March to a seasonally adjusted annual rate of $746.9 billion. Volatility caused by the presence or absence of large projects in healthcare and the utility/gas plant category, however, skewed the analysis. In March, nonresidential building starts fell 9% from February (seasonally adjusted), while residential building dropped 11%. Nonbuilding construction starts, however, rose 14% during the month.
For the 12 months ending March 2020, total construction starts were 2% higher than they were for the same period ending March 2019. Residential building starts were 3% higher, while nonbuilding starts were up 5% for the 12 months ending March 2020. Nonresidential building starts, however, were down less than one percent. The Dodge Index dropped to 158 (2000=100) in March from the 167 posted in February.
Considering the calamity that occurred towards the end of March as the fallout from the COVID-19 (Coronavirus) hit the economy, construction starts held up rather well, stated Richard Branch Chief Economist for Dodge Data & Analytics. Construction starts in March were unlikely to be greatly impacted as projects that broke ground during the month likely had materials sourced and in-place and labor booked well ahead of the scheduled groundbreaking. That momentum and planning is difficult to reverse at the last minute. Additionally, most of the stay-at-home orders and construction moratoriums were not instituted until the last week of the month and into April. Therefore, April construction starts are likely to be a very different story with states like New York, New Jersey, and Pennsylvania among others banning construction activity. April s starts data will be the first true indication of how the crisis will impact the construction industry.
Nonbuilding construction jumped 14% in March to a seasonally adjusted annual rate of $168.9 billion due to the start of several large electric power facilities. When the massive 161% gain in the utility/gas plant category is removed from the total, nonbuilding starts fell 9% during the month. Highway and bridge starts rose 5%, although the environmental public works category dropped 5% and the miscellaneous nonbuilding category fell 44%.
The largest nonbuilding project to break ground in March was the $1.0 billion 1,085 MW Indeck Niles Energy Center power plant in Niles MI. Also starting in March were the $600 million Jordan Creek Wind Farm in Williamsport IN and the $469 million Titan Solar Project in Culberson county TX.
For the twelve months ending March 2020, total nonbuilding starts were 5% higher than the twelve months ending March 2019. Starts in the utility/gas plant category were 62% higher, while environmental public works were down slightly. Street and bridge starts were 5% lower for the twelve months ending March, while miscellaneous nonbuilding was down 15%.
Nonresidential building starts fell 9% in from February to March to a seasonally adjusted $259.8 billion. Commercial building starts were 5% lower, with losses in three of the five commercial sub-categories (warehouses and parking structures made gains). Manufacturing buildings dropped 7% during the month, while institutional buildings dropped 12%. Institutional buildings posted a large gain in February due to the start of several large healthcare facilities, which were not present in the March statistics. However, education facilities posted a solid 18% gain in March.
The largest nonresidential building project to break ground in March was the $616 million Duncan Neuroscience Research Facility in Saint Louis MO. Also getting started in March was a $415 million Amazon fulfillment warehouse in Wilmington DE and a $369 million Amazon fulfillment center in Colorado Springs CO.
On a 12 month total basis, nonresidential building starts were less than one percentage point lower than they were for the 12 months ending March 2019. Commercial starts were up 2%, while institutional building starts were 1% lower and manufacturing starts were down 7%.
Residential building starts moved 11% lower in March to a seasonally adjusted annual rate of $318.2 billion. During the month, single family starts dropped 14%, while multifamily starts lost 3%.
The largest multifamily structure to break ground during in March was the $420 million Hunter s Point South Mixed-Use building in Long Island City NY. Also starting during the month was the $200 million Piazza Terminal Mixed-Use building in Philadelphia PA and the $125 million Adeline Residences in Phoenix AZ.
For the 12 months ending in March, total residential starts were 3% higher than the 12 months ending March 2019. Single family starts were up 5%, while multifamily building starts were less than one percent lower.