November Construction Starts Jump 13 Percent
At a seasonally adjusted annual rate of $677.8 billion, new construction starts in November climbed 13 percent from the previous month, according to Dodge Data & Analytics (formerly McGraw Hill Construction). Nonresidential building had a particularly strong month, lifted by the start of several unusually large projects, including two massive manufacturing plants and an airport terminal redevelopment. Meanwhile, residential building retreated in November, as multifamily housing settled back from its brisk pace in October. For the first 11 months of 2014, new construction starts (including non-building) on an unadjusted basis were $530.8 billion, up 7 percent from the same period a year ago.
The November statistics raised the Dodge Index to 143 (2000=100), up from a revised 127 for October and marking the strongest month so far in 2014.
Nonresidential building in November soared 32 percent to $256.7 billion (annual rate). A substantial boost came from a 253 percent increase for the manufacturing plant category, maintaining the often volatile behavior that’s been present this year. If the manufacturing plant category is excluded, nonresidential building in November would have still shown a moderate gain, rising 10 percent. The commercial building group in November grew 7 percent, resuming its upward track after easing back in the previous two months. Hotel construction posted a 15 percent November gain; office construction advanced 7 percent; and both stores and warehouses lost momentum in November, slipping 5 percent and 7 percent, respectively.
The institutional building group in November increased 12 percent, aided by a healthy gain for transportation terminal work, up 221 percent. Also showing growth was the public buildings category, improving 12 percent. On the negative side, educational facilities slipped 6 percent, and weaker activity was also registered by churches, down 18 percent, and amusement-related facilities, down 36 percent.
During the first 11 months of 2014, nonresidential building climbed 17 percent relative to the same period a year ago. Manufacturing plant construction surged 82 percent year-to-date, and the commercial building group increased 13 percent year-to-date, featuring gains for hotels, up 28 percent; office buildings, up 24 percent; and warehouses, up 15 percent; while store construction lagged behind with a 1 percent decline. The institutional building group grew 6 percent year-to-date, lifted by an 11 percent increase for educational facilities, which is the largest nonresidential building category by dollar volume. Other gains were reported for amusement-related facilities, up 10 percent; transportation terminals, up 8 percent, and public buildings, up 2 percent. Declines were reported for healthcare facilities, down 3 percent; and churches, down 12 percent.
Residential building in November fell 6 percent to $238.5 billion (annual rate). Multifamily housing retreated after its strong October performance, sliding 21 percent. Despite the decline, there were still a substantial number of large multifamily projects that reached groundbreaking in November, including 11 projects valued at $100 million or more. Single-family housing in November edged up a slight 1 percent, essentially holding steady with the flat activity that’s been present since the end of last year.
During the first 11 months of 2014, residential building grew 7 percent compared to a year ago, a much smaller increase than the 26 percent gain reported for full year 2013. Single-family housing was up only 2 percent year-to-date. Multifamily housing revealed a much stronger year-to-date performance, climbing 25 percent.