At a seasonally adjusted annual rate of $629.4 billion, new construction starts in July were essentially unchanged from June’s pace, according to Dodge Data & Analytics. By major sector, nonresidential building showed slight improvement following its lackluster June performance, while residential building maintained the strengthening trend witnessed over the past several months.
Highway and bridge construction retreated 19 percent in July.
At the same time, nonbuilding construction in July continued to slide back from the exceptional activity witnessed earlier in the year that reflected the start of very large projects, including several massive liquefied natural gas terminals. Through the first seven months of 2015, total construction starts on an unadjusted basis were $397.0 billion, up 19 percent from the same period a year ago. Leaving out the volatile electric utility and gas plant category, total construction starts during the first seven months of 2015 would be up a more moderate 10 percent from the same period a year.
“The first half of 2015 showed wide swings in the pattern of total construction starts, affected by the presence or absence of unusually large projects,” stated Robert A. Murray, chief economist for Dodge Data & Analytics. “Amidst these top-line swings, the underlying trend of activity has been generally upward relative to last year. For nonresidential building, support has come primarily from its institutional segment, including educational facilities, transportation-related buildings, and amusement and recreational facilities. The commercial categories showed some deceleration during the early months of 2015, but positive real estate market fundamentals are expected to encourage renewed growth. Residential building has benefitted from this year’s heightened amount of multifamily starts, and even the single-family side of the market is showing some hesitant signs of strengthening.”