Construction Starts to Drop 7% in July Led by 31% Drop in Nonbuilding Segment

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Robison Wells
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According to the most recent report from Dodge Data and Analytics, total construction starts for July fell 7%. This sharp drop was led primarily by a 31% dip in the non-building segment. (Nonbuilding consists of industrial, roads, public works, etc.) Nonresidential starts rose 3% and residential dropped 2%.

Compared to the same period last year, we’re off by 15%, though nonresidential is 24% off 2019 numbers.

“The July decline in construction starts should not be interpreted as a setback on the sector’s road to recovery,” Richard Branch, chief economist for Dodge Data & Analytics, said in the report. “The gains in the nonresidential and residential sectors mirror the general overall improvements in the economy. The drop in public works could represent a settling back inactivity following a solid spring in which some projects broke ground earlier than expected to take advantage of the fewer cars on the road during the COVID-19 shut down in March and April.”

The non-building sector accounts for approximately $132 billion per year. The bulk of the dip came in utilities/gas plants, which went down by 58% (though they had significant gains in June and May). The largest gas project to go forward in July was the $1 billion Whistler Natural Gas Pipeline in Texas.

The highways and bridges segment of the non-building sector also dropped by 25%, with the largest new project being a $421 million widening of Interstate 26.

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