Posted November 20, 2018

Dodge: October construction starts soar 21 percent

Nonresidential building rebounds sharply from subdued activity in recent months.

New construction starts in October climbed 21% to a seasonally adjusted annual rate of $864.0 billion, according to Dodge Data & Analytics. The substantial increase followed three straight months of decline, during which the pace of total construction starts fell 22% from the exceptionally strong volume reported back in June.

Nonresidential building in October surged 53%, as several very large projects lifted the manufacturing plant, office building, and transportation terminal categories.

Nonbuilding construction in October advanced 14%, supported by growth for public works while the electric utility/gas plant category bounced back from depressed activity in September.

Residential building in October edged up a slight 2%, helped by improvement for multifamily housing.

During the first ten months of 2018, total construction starts on an unadjusted basis were $679.1 billion, up 1% from the same period a year ago. The year-to-date gain for total construction starts was restrained by a 45% slide for the electric utility/gas plant category. If the electric utility/gas plant category is excluded, total construction starts during the first ten months of 2018 would be up 3% relative to the same period a year ago.

October’s data raised the Dodge Index to 183 (2000=100), up from September’s 150, marking the second highest reading for the Dodge Index so far in 2018 after June’s 192. Through the first ten months of 2018, the Dodge Index averaged 169, up slightly from the full year 2017 average of 166.

“During 2018, the presence of very large projects in a given month has played a considerable role in shaping the monthly pattern of activity, and in October it was nonresidential building that especially benefitted from the start of very large projects,” stated Robert A. Murray, chief economist for Dodge Data & Analytics.

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