Construction starts decreased by 1% to $767.5 billion from January to February, according to Dodge Data & Analytics.
The Hamilton-based provider of analytics and software for the construction industry said during the month, nonresidential building increased due to large projects in the office and health care sectors, while residential and nonbuilding construction starts decreased.
For the 12 months ending February 2020, total construction starts were 3% higher than the same period 12 months before. When focusing on the major categories, nonresidential building starts were 3% higher, residential starts were up by 1% and nonbuilding starts increased by 7%.
“The good news is that heading into the coronavirus pandemic, construction starts were stable. The economy was healthy fueled by continued steady job growth,” Richard Branch, chief economist of Dodge Data and Analytics, said. “Of course, the pandemic’s effect on future starts is as yet unknown. Construction firms will need to deal with multiple issues including supply chain disruptions, workforce constrictions due to the outbreak, and an economy that has moved from a pace near its long-term potential to a virtual stall within the space of a week. Over the next few months, many construction projects could see delays in start or longer times to completion based on shortages of supplies from China or a reduction in available labor due to spread of the virus. Still others may begin to see projects cancelled outright due to a sudden circumstantial change in demand. Planning data as reported to Dodge Data & Analytics will be watched closely to see if fissures are developing in the construction sector.”
In the nonbuilding construction category, declines were seen over the month in the highway and bridges sector and the utility and gas, down 17% and 22% respectively. However, gains were seen in the miscellaneous nonbuilding category and environmental public works, up by 14% and 1%.
In the nonresidential category, both commercial construction starts and institutional starts moved higher, by 7% and 13% respectively. Manufacturing starts fell 27%.
In the residential category, single family starts dropped 7%, while multifamily starts increased 3%.
