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Total Construction Flat in December

Jan. 19, 2022
Gains in residential and nonresidential construction were not enough to offset a drop in the nonbuilding construction category.

Total construction starts were flat in December with a seasonally adjusted annual rate of $879.3 billion, according to Dodge Construction Network. Residential construction starts gained 4% in December 2021, while nonresidential building starts improved by +3%. Nonbuilding starts, however, declined -12%.

Across 2021, total construction starts rose by +12% compared to 2020. Residential starts moved 20% higher, and nonresidential buildings increased +12%. Nonbuilding starts were flat in 2021.

 “The increase in construction starts was impressive given the many challenges the industry faced during the year. Higher material prices, labor shortages, and multiple waves of COVID infections threatened to dampen the recovery,” said Richard Branch, chief economist for Dodge Construction Network, in the press release. “However, construction remained resilient and persistent throughout the year in the face of these difficult issues. While these challenges will remain in 2022, the industry is well-positioned to make further gains fed by a growing pipeline of nonresidential projects waiting to break ground and the infusion of money directed towards infrastructure.”

Nonbuilding constructionstarts lost -12% in December to a seasonally adjusted annual rate of $166 billion. The only sector within nonbuilding to gain ground during the month was environmental public works, which gained +40%. Utilities/gas plants fell -79%, miscellaneous nonbuilding dropped -23%, and highway and bridge starts fell by less than -1%. For the full year, nonbuilding starts improved by +0.4% from 2020. Environmental public works rose +21% and utilities/gas plants moved 6% higher. However, miscellaneous nonbuilding starts were down -16% for the full year, and highway and bridge starts fell -6%.

The largest nonbuilding projects to break ground in December were the $1.3-billion East Side Coastal Resiliency project in New York; the $305-million Kirkman Road extension in Orlando, FL; and the $177-million first phase of the Friant-Kern Canal Middle Reach project in Lindsay, CA.

Nonresidential building starts improved +3% in December to a seasonally adjusted annual rate of $284.3 billion. The commercial sector advanced +12% due to gains in retail, office, and hotel starts while parking structures lost ground. Institutional starts fell -17% in December as healthcare pulled back following a strong November. Manufacturing starts, meanwhile, posted a significant gain due to the start of a large project. For the full year, nonresidential building starts gained +12% from 2020. Commercial starts were up 8%, institutional starts improved +5%, and manufacturing starts rose +89% for the year.

The largest nonresidential building projects to break ground in December were the $700-million expansion of the Danimer Scientific manufacturing facility in Bainbridge, GA; the $650-million expansion of the Los Angeles County Museum of Art in Los Angeles; and the $500-million renovation of the Fontainebleau Hotel in Las Vegas.

Residential building starts rose +4% in December to a seasonally adjusted annual rate of $429 billion. Multi-family starts moved +5% higher, and single family starts gained +3%. For the full year, residential starts were +20% higher than in 2020; multi-family starts rose +25%; and single family starts increased +18%.

The largest multi-family structures to break ground in December were the $1-billion Southside Park mixed-use building in Miami; the $398-million first phase of the Broadview at Purchase College senior living facility in Purchase, NY; and the $300-million 800 Broadway apartment tower in San Diego, CA.

 Regionally, total construction starts in December rose in the South Atlantic and Northeast regions, but fell in the Midwest, South Central, and West regions.