Total construction starts declined -25% from March to April to a seasonally adjusted annual rate of $572.2 billion as COVID-19 and economic recession hit the construction sector, according to Dodge Data & Analytics.
In April, nonresidential building starts fell -37% from March, while residential dropped -25%. The Dodge Index tumbled to 121 (2000=100) in April from the 161 posted in March. This is the lowest reading of the Dodge Index since May 2014.
“The April starts data is definitely sobering, but also very much expected,” said Richard Branch, chief economist for Dodge Data & Analytics, in the press release. “The near shuttering of the economy during April had a significant negative effect on the construction industry, leading to delays in both ongoing projects as well as those about to break ground. Even though parts of the country are beginning to reopen, and some areas that had paused construction are now restarting, it will be a very long road back to normalcy for the construction industry. Continued fear of a resurgence in the virus will lead to a continued reduction in economic activity over the coming months, affecting construction projects across the country. The economic and construction recoveries will remain sluggish until a vaccine or viable treatment becomes available.”
Nonresidential building starts crashed -37% from March to April reaching a seasonally adjusted annual rate of $170.2 billion – the lowest monthly reading since early 2014. April’s decline was much sharper than any single month-to-month drop seen during the Great Recession. The severity of the decline was widespread. Commercial starts fell -47%, manufacturing starts dropped -56%, while institutional construction starts lost -26%. The largest nonresidential building project to start in April was the $950-million expansion of Portland International Airport. Also starting during the month were the $253-million Wildcreek High School/Procter Hug High School in Sparks, NV, and the $140-million Waddell & Reed headquarters tower in Kansas City, MO.
As a result of the April data, nonresidential building starts were down 14% year-to-date. Commercial starts were down 18% year-to-date, while manufacturing starts were 34% lower and institutional starts dropped 6%. In the past twelve months, nonresidential building starts were down 3% from the previous twelve months. Commercial starts were down 1%, while institutional building starts were 3% lower, and manufacturing starts slid 5%.
Residential building starts moved -25% lower in April to a seasonally adjusted annual rate of $245.4 billion. Over the month, single family starts dropped -21%, while multifamily starts lost -36%.
The largest multifamily structure to break ground during April was the $217-million Hanover Square & Bayou Apartments in Houston. Also starting during the month were the $140-million Modera New Rochelle Mixed Use project in New Rochelle, NY, and the $115-million Miami Urban Village Apartments in Homestead, FL.