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New Construction Starts in November Slip 6 Percent

At a seasonally adjusted annual rate of $638.3 billion, new construction starts in November retreated 6 percent from October, according to Dodge Data & Analytics. Each of the three major construction sectors experienced reduced activity in November.

    

For the first 11 months of 2016, total construction starts on an unadjusted basis were $627.2 billion, essentially matching the amount reported for the same period a year ago. During the second half of 2016, the year-to-date performance for total construction starts has shown consistent improvement, even with the recent deceleration, given the comparison to the weaker activity reported during last year’s second half. Excluding the volatile manufacturing plant and electric utility/gas plant categories, total construction starts during the January–November 2016 period would be up 4 percent.

    

The November statistics lowered the Dodge Index to 135 (2000=100), down from a revised 143 for October. While the Dodge Index has retreated from its most recent high of 154 in August, the November reading was still 7 percent above 2016 low of 126 in July.

    

Nonresidential building in November dropped 5 percent to $224.6 billion (annual rate) while residential building, at $275.4 billion (annual rate), fell 5 percent.

    

The “no change” for total construction starts at the national level during the first 11 months of 2016 was the result of a mixed performance for total construction starts at the five-region level. Year-to-date total construction gains were reported in the West, up 10 percent; the South Atlantic, up 9 percent; and the Midwest, up 6 percent. Year-to-date total construction declines were reported in the Northeast, down 1 percent; and the South Central, down 17 percent.

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