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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Year-to-Date

For the first two months of 2015, total construction starts on an unadjusted basis were up 34 percent from the same period a year ago. If projects in excess of $1 billion are excluded, the result would be more moderate gains for total construction – up 10 percent in February on a seasonally adjusted basis relative to January, and up 8 percent on an unadjusted basis during the first two months of 2015 relative to the same period a year ago.

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Nonresidential Building

Nonresidential building, at $224.9 billion (annual rate), surged 42 percent in February after a relatively weak performance in January. The manufacturing building category was a major contributor, soaring 663 percent in February with $3.0 billion for the estimated construction start cost of the Formosa ethane cracker and propane dehydrogenation plant in Point Comfort, Texas.

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Residential Building

Residential building in February grew 5 percent to $245.7 billion (annual rate), making a partial rebound after an 8 percent decline in January. Multifamily housing registered a strong February, jumping 46 percent. There were nine multifamily projects valued in excess of $100 million that reached groundbreaking in February, led by the following – the $500 million Flushing Commons apartment complex expansion in Queens, N.Y., a $300 million apartment high-rise in New York, and the $262 million condominium portion of the Four Seasons mixed-use tower in Boston.

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Nonbuilding Construction

Nonbuilding construction in February increased 9 percent to $253.8 billion (annual rate), which followed its substantial 92 percent hike in January. The electric utility and gas plant category in February topped its heightened January amount by 17 percent, with the inclusion of the Sempra LNG export terminal in Hackberry, La., at an estimated construction start cost of $8.4 billion. (In January, two segments of an LNG export facility in Freeport, Texas, valued at $6.0 billion were included as construction starts.)

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