Building markets in the U.S. have been negatively impacted by COVID-19 and the current recession. Commercial and multifamily starts were up in the first quarter of 2020, but stalled out as the pandemic crept through the nation mid-March, according to Dodge Data & Analytics.
The Hamilton-based provider of analytics and software for the construction industry said during in first three months of 2020, multifamily and commercial starts were up only 1% from the same period last year.
Commercial and multifamily starts are comprised of office buildings, stores, hotels, warehouses, commercial garages and multifamily housing. Not included are institutional building projects, manufacturing buildings, single-family homes, public works and electric utilities/gas plants.
In the first half of the year, starts decreased 22% year-over-year. The only category to experience a gain was in construction, but it was small. Commercial and multifamily construction starts in the Top 20 metropolitan areas also dropped 22% in the first six months of 2020.
The New York metro area, which includes New Jersey, remained at the No. 1 spot despite falling 24% to $11.5 billion year-over-year. In second was Washington D.C. even with its starts falling 42% to $4.2 billion. Next up, Dallas, Texas, which rounded out the Top 3 due to activity dropping 2% to $3.8 billion.
The remaining Top 10 markets:
4. Los Angeles, California (-18% to $3.3 billion);
5. Chicago IL (-9% to $3.0 billion);
6. Boston MA (-31% to $3.0 billion);
7. Miami FL (-16% to $2.8 billion);
8. Phoenix AZ (+82% to $2.8 billion);
9. Austin TX (-12% to $2.4 billion);
10. Houston TX (-38% to $2.4 billion).
In the second-tier metro areas (No. 11-20), commercial and multifamily starts were down 25% and only one metro area had an increase. In the Philadelphia-Camden-Wilmington area (No. 12) starts dropped 25% to $2.1 billion.
“The COVID-19 pandemic and recession have devastated most local construction markets,” Richard Branch, chief economist for Dodge Data & Analytics, said. “Across the board, building projects have been halted or delayed with virtually no sector immune from damage. Construction starts have begun to increase from their April lows and there is cautious optimism that as the year progresses construction markets around the country will begin a modest recovery. However, the recent acceleration of COVID-19 cases in the South and West as well as the upcoming expiration of expanded unemployment insurance benefits (from the CARES Act) puts the recovery at significant risk and could undermine the construction sector’s ability to grow.”