Nonresidential down 12%; residential dips only slightly
According to the Dodge Construction Network, total construction starts fell 12% in March. Nonresidential construction led the decline, dropping 29%. Residential starts, in contrast, only lost 3%.
Year-to-date, total construction rose 9% over the first three months of the previous year.
February tough act to follow
However, the raw numbers from March may hide a significant factor: in February, three large plants broke ground, each priced in the billions of dollars; this made for a tough act to follow for March’s growth figures.
“The volatility caused by the ebb and flow of large projects masks an underlying trend of strengthening in construction starts,” stated Richard Branch, chief economist for Dodge Construction Network. “Nonresidential construction has benefited from the growing confidence that the worst of the pandemic is in the rear-view window. The pipeline of projects waiting to start continues to fill, suggesting this trend will continue. However, higher prices and a shortage of skilled labor will slow the progress of those projects through the design and bidding stages, resulting in moderate growth in starts activity.”
NV, AZ, and LA lead in super projects
The most significant nonresidential building projects to break ground in March were the $505 million Switch SuperNap data center in Sparks, NV, the $460 million Park 303 office building in Glendale, AZ, and upgrades of $410 million to an Exxon Mobil refinery in Baton Rouge, LA.
Multi-family still strong
Single-family starts fell 5% in the residential market, but multi-family units rose 4%.
In March, total construction starts rose in the South Atlantic region but fell in all other areas.
One might interpret slowing numbers of construction project starts as an across-the-board decline in building; however, lower numbers might skew the overall picture on the tails of a few significant projects.
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