Total construction starts increased +6% in June to a seasonally adjusted annual rate of $641.4 billion, according to Dodge Data & Analytics. 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. In June, the Dodge Index moved +6% higher to 136 (2000=100) from the 128 reading in May. Compared to a year earlier, the Dodge Index was down -28%
“Construction starts activity remains significantly weaker than year-ago levels, even though it has been slowly increasing since its nadir in April,” said Richard Branch, chief economist for Dodge Data & Analytics, in the press release. “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.”
The largest nonbuilding project to break ground in June was the $1.4-billion Federal Way Link Extension in Seattle. Also starting during the month were the $600-million Golden Hills Wind Project in Sherman County, OR, and the $438-million Athos I solar facility in Desert Center, CA.
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%. The largest nonresidential building project to break ground in June was the $384-million Women’s and Children’s hospital tower in San Antonio, TX. 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.
Residential building starts fell -6% in June to a seasonally adjusted annual rate of $251.8 billion. Both multi-family and single-family starts were lower during the month, with single family falling -7% and multi-family dropping -4%.
The largest multi-family structure to break ground in June was a $170-million mixed-use project in Jersey City, NJ. Also starting during the month were the $113-million Flower Mart Apartments in Mountain View, CA, and the $100-million 509 4th Avenue project in New York.
Through the first six months of 2020, residential construction starts were down -5% versus the same time period in 2019. Single-family starts were 1% lower, while multi-family starts were down -16% year-to-date. For the 12 months ending in June, total residential starts were flat when compared to the prior 12 months. Single-family starts were up +3%, while multifamily starts were off -6%.