Total construction starts rose +10% in September to a seasonally adjusted annual rate of $889.7 billion, according to Dodge Construction Network. All three sectors improved. Nonresidential building starts rose +15%; residential starts moved +9% higher; and nonbuilding starts increased by +6%.
“Construction starts have struggled over the last three months as concerns over rising prices, shortages of materials and scarce labor led to declines in activity,” said Richard Branch, chief economist for Dodge Construction Network, in the press release. “The increase in September, however, partially allays the fear that construction is headed for a free-fall and shows that owners and developers are still ready to move ahead with projects. Starts are likely to continue to trend in a positive but sawtooth fashion in the coming months until a more balanced recovery takes hold next year.”
Nonresidential Building Starts
In the nonresidential sector, starts rebounded in September, gaining +15% to a seasonally adjusted annual rate of $281.8 billion. Commercial buildings rose +13% as starts improved for the hotel, warehouse and retail sectors. Office building starts fell. Institutional building starts rose +13% with all sectors but public buildings improving over the month. Manufacturing starts jumped +47% following a particularly weak August. In the first nine months of 2021, nonresidential building starts were +7% higher. Commercial starts increased +8% and manufacturing starts were +38% higher, but institutional starts were up just +2%.
For the 12 months ending in Sept. 2021, nonresidential building starts were -1% lower than in the 12 months ending in Sept. 2020. Commercial starts were down -1% and manufacturing starts dropped -12% in the 12 months ending Sept. 2021.
The largest nonresidential building projects to break ground in September were the $670-million modernization program at Pittsburgh International Airport in Pittsburgh; the $658-million Irvine Campus Medical Complex in Irvine, CA; and the $495-million Phillips 66 Sweeny Hub Fractionator in Sweeny, TX.
Total residential starts rose a solid +9% in September to a seasonally adjusted annual rate of $430 billion. Single-family starts gained +9% in September, while multi-family starts increased by +24%. Through nine months, residential starts were +25% higher than in the same period one year ago. Single-family starts gained +26%, and multi-family starts grew +20%. For the 12 months ending in Sept. 2021, total residential starts were +22% higher than the 12 months ending in Sept. 2020. Single-family starts gained 26%, and multifamily starts were up +10% on a 12-month sum basis.
The largest multi-family structures to break ground in September were the $300-million Islablue Apartments in Long Beach, NY; the $256-million Station Square Apartments (phase 2A) in Ronkonkoma, NY; and the $215-million 906 W. Randolph mixed-use project in Chicago.
Nonbuilding Construction Starts
Starts rose +6% in September to a seasonally adjusted annual rate of $177.9 billion. Miscellaneous nonbuilding starts (pipelines, site work, etc.) and environmental public works (water, sewers, etc.) each gained +29%, while highway and bridge starts gained less than +1%. On the downside, utility/gas plant starts dropped -53%. Year-to-date, total nonbuilding starts were essentially unchanged through September. Environmental public works were +24% higher, while highway and bridge starts were -2% lower. Miscellaneous nonbuilding fell -14% and utility/gas plant starts fell -10% during the first nine months of the year.
For the 12 months ending in Sept. 2021, total nonbuilding starts were -1% lower than the 12 months ending in Sept. 2020. Environmental public works starts were +22% higher and highway and bridge starts were up +3%, while utility and gas plant starts were down -20% and miscellaneous nonbuilding starts were -16% lower.
The largest nonbuilding projects to break ground in September were the $500-million Whale offshore oil field pipeline near Houston; the $485-million Chimney Hollow Reservoir Dam in Berthoud, CO; and the $450-million repairs at the Coast Guard Station in Fort Macon, NC.