November a Mixed Month for Construction StartsDecember 17th, 2020 | Category: Industry News
Total construction starts fell 2% in November to a seasonally adjusted annual rate of $797.5 billion following a strong gain in October. Residential starts fell 7% during the month, while nonbuilding starts dropped 14%. Nonresidential building construction starts, however, rose 19% in November. Total construction starts fell in three regions, the South Atlantic, West and Northeast, but rose in two, the Midwest and South Central.
Year-to-date through 11 months, total construction starts were 12% down from the same period in 2019. Nonresidential starts were 25% lower, while nonbuilding starts were down 16%. Residential starts, by contrast, were 3% higher through 11 months.
“November construction starts were somewhat of a mixed bag,” says Richard Branch, chief economist for Dodge Data & Analytics. “On the positive side, the gain in nonresidential building starts shows that the recovery from the early months of the pandemic remains on course. If not for the start of a very large bridge and tunnel project in October, nonbuilding starts would actually have posted a tepid gain in November. And despite the November decline in single family starts, tremendous positive momentum remains in the housing sector. There remains significant concern, however, about the ability of construction starts to maintain their current pace in the face of rising COVID-19 cases, the uncertain outlook for additional federal stimulus, and the lack of agreement on funding the federal government past December 18. While the near-term outlook for starts remains cloudy, the recent deployment of a vaccine in the U.S. raises hope and expectation that 2021 will be a better year.”
Nonresidential building starts moved 19% higher in November to a seasonally adjusted annual rate of $249.7 billion. The commercial sector increased 27% as two large office projects got underway. Gains were also seen in the hotel, warehouse and parking structures categories. Institutional construction starts increased 17% over the month due to gains in healthcare and education. Manufacturing starts, meanwhile, fell 29% in November.
The largest nonresidential building project to get started in November was the $1.3 billion One Madison Avenue office project in New York. Also starting was the $940 million Richard Boulevard Office Complex in Sacramento, Calif., and the $615 million Baptist Healthcare Hospital in Pensacola, Fla.
Year-to-date through the first 11 months of 2020, total nonresidential building starts were down 25%. Commercial starts were 26% lower, while institutional starts were down 15% and manufacturing starts were 63% lower.