Construction Starts Show Additional Gains in JuneJuly 22nd, 2020 | Category: Industry News
Total construction starts increased 6% in June to a seasonally adjusted annual rate of $641.4 billion. This marks the second consecutive monthly gain in construction starts following the COVID-19 induced declines in March and April. In June nonresidential building starts gained 6% and starts in the nonbuilding sector moved 27% higher. Residential starts, by contrast, fell 6% during the month.
Through the first six months of the year, starts were down 14% from the same period in 2019. Nonresidential starts fell 22%, nonbuilding starts were down 14% and residential starts dropped 5%. For the 12 months ending in June 2020, total construction starts were down 2% from the previous 12 months. Nonresidential building starts were down 7% and residential building starts were flat, but nonbuilding starts were 3% higher in the past 12 months.
“Construction starts activity remains significantly weaker than year-ago levels, even though it has been slowly increasing since its nadir in April,” says Richard Branch, chief economist for Dodge Data & Analytics. “May’s gain in starts was fueled by a handful of very large projects, but June’s gain appears to be much more organic in nature. Construction starts should continue to post modest gains in the months to come as the economy continues to recover from the shortest and steepest recession in U.S. history. However, the recent acceleration in new COVID-19 cases in states such as Texas, Florida and California is a significant downside risk to the economy and the construction industry’s growth trajectory.”
Nonresidential building starts moved 6% higher in June to a seasonally adjusted annual rate of $198.5 billion. Institutional building starts rose 15% during the month, while commercial building starts moved 4% higher. Manufacturing starts, however, fell 32% following the start of a $950 million steel plant in May.
The largest nonresidential building project to break ground in June was the $384 million Women’s and Children’s hospital tower in San Antonio. Also starting in June was the $306 million Aligned Energy Data Center in Ashburn, Va., and the $294 million renovation of SeaTac International Airport in Seattle.
On a year-to-date basis, total nonresidential building starts were 22% lower than the first six months of 2019. Institutional building starts were down 15% while commercial starts were 27% lower. Manufacturing starts dropped 38% on a year-to-date basis. On a 12-month total basis, total nonresidential building starts were 7% lower than the 12 months ending June 2019. Commercial starts have dropped 8%, while institutional starts were down 9%. Manufacturing starts are 9% higher on a rolling 12-month basis.