editorial

New Construction Starts: Big Gains Year-to-Date

New construction starts in March retreated 13 percent from the previous month to a seasonally adjusted annual rate of $633.3 billion, according to Dodge Data & Analytics. The decline followed strong gains in January (up 9 percent) and February (up 17 percent), when construction was lifted by the start of several massive projects valued each in excess of $1 billion, including four liquefied natural gas (LNG) terminal projects, a petrochemical plant, and a solar power facility.

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Nonresidential Building

Nonresidential building in March fell 19 percent to $183.5 billion (annual rate), after surging 43 percent in February. The manufacturing building category in March plunged a steep 57 percent from its elevated February pace. Although March did feature the start of several large manufacturing projects, such as a $751 million polyethylene plant and a $150 million cement plant expansion, both located in Texas, the prior month had included the start of a $3.0 billion ethane cracker and propane dehydrogenation plant, also located in Texas.

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Residential Building

Residential building in March was reported at $251.4 billion (annual rate), essentially even with the previous month. Single-family housing edged up a slight 1 percent, due to a mixed pattern by major region – the Northeast, up 19 percent; the Midwest, up 4 percent; the South Central, up 1 percent; and the South Atlantic and the West, each down 1 percent.

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Nonbuilding Construction

Nonbuilding construction, at $198.5 billion (annual rate), dropped 22 percent in March. A steep plunge for the electric utility and gas plant category, down 73 percent, was entirely responsible for the latest month’s nonbuilding decline.

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Year-to-Date: Big Jump

For the first three months of 2015, total construction starts on an unadjusted basis were up 28 percent from the same period a year ago.

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