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Construction Starts Down to Begin 2021

Total construction starts dropped 4% in January to a seasonally adjusted annual rate of $794.3 billion. Nonresidential building starts were flat in January, while nonbuilding starts dropped 10% and residential starts were 4% lower. From a regional perspective, starts were lower in three of the five regions: the Midwest, South Atlantic and South Central. Starts rose, however, in the Northeast and West.

    

With only one month of 2021 completed, a year-to-date analysis will provide little useful information. Additionally, January 2020 (i.e., pre-pandemic) was the culmination of a strong cyclical upswing in construction starts that began in 2010 and thus provides a poor point of comparison. An alternative viewpoint for analysis is comparing 12-month totals. For the 12 months ending January 2021 total construction starts were 11% below the 12 months ending January 2020. Nonresidential starts were down 25%, while nonbuilding starts dropped 15%. Residential starts, however, were 5% higher for the 12 months ending January 2021. In January, the Dodge Index lost 4% to 168 (2000=100) from the 175 reading in December.

    

Nonresidential building starts were unchanged in January at a seasonally adjusted annual rate of $224.5 billion. Commercial starts were 1% higher during the month as a sizeable gain in warehouse construction offset declines elsewhere. Institutional building starts fell 9% in January, with education and healthcare construction down sharply. Manufacturing starts, meanwhile, rose 81% due to the start of two large projects. For the 12 months ending January 2021, nonresidential building starts tumbled 25% relative to the 12 months ending January 2020. Commercial starts dropped 27%, institutional starts were 15% lower, while manufacturing starts collapsed 59%

    

Residential building starts fell 4% in January to a seasonally adjusted annual rate of $401.4 billion. Multifamily housing starts were 7% lower, while single family dropped 3%. For the 12 months ending January 2021, total residential starts were 5% higher than the 12 months ending January 2020. Single family starts gained 12%, while multifamily starts slid 12% on a 12-month sum basis.

    

Nonbuilding construction started 2021 with a resounding 10% decline in January to a seasonally adjusted annual rate of $168.4 billion. For the 12 months ending January 2021, total nonbuilding starts were 15% lower than the 12 months ending January 2020.

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