Nonresidential starts fell 24% in September 2020 compared to the previous month, while residential building dropped 21% over the month, according to Dodge Data & Analytics. The company, which provides analytics and software-based workflow integration solutions for the construction industry, also reported that its Index fell 18% in September from the previously month. It was down 23% compared to a year earlier and 21% lower than its pre-pandemic level in February.
Year-to-date through nine months, nonresidential starts were lower by 26% while residential starts gained 1%, according to Dodge. For the 12 months ending September 2020, nonresidential building starts were 19% lower, while residential building starts rose 4%.
“That construction starts took a significant step back in September is disappointing, but also not surprising,” stated Richard Branch, chief economist for Dodge Data & Analytics.
Branch added: “The economic recovery has lost momentum and is showing strain since support provided to consumers and businesses from expanded unemployment insurance benefits and the Paycheck Protection Program have expired. The worsening budget crisis for state and local areas has also slowed growth in public project starts, particularly in the face of a somewhat uncertain outlook for federal infrastructure spending programs. The road to recovery will continue to be uneven and fraught with potholes until a vaccine is developed and widely adopted across the U.S.”
Nonresidential building starts decreased to $177.4 billion in September. There was little good news in the detail: institutional starts fell 8%, manufacturing starts were 48% lower, and commercial starts dropped 36%. Only two building types posted a gain in September – retail and public buildings.
The two largest nonresidential building projects to break ground in September were the $330 million second phase of the Iceberg Towers in Burbank, Calif., and the $330 million East Market Mixed-Use complex in Philadelphia. These projects were followed by the $296 million first phase of the Moffitt Cancer Center Hospital in Tampa, Fla.
Year-to-date through September, commercial starts declined 27%, while institutional starts were 18% lower. Manufacturing starts dropped a painful 56% compared to the first nine months of 2019.
For the 12 months ending September 2020, institutional building starts were 16% lower, commercial starts down 19%, and manufacturing starts plummeted 30%.
Residential building fell to a seasonally adjusted annual rate of $314 billion in September. Single family starts dropped 6% in the month as multifamily starts tumbled 54%.
The two largest multifamily structures to break ground in September were the $130-million AJ Railyards mixed-use building in Sacramento, Calif., and the $130-million Sage Valley Apartments in West Valley City, Utah. The $125-million Avenir mixed-use building in Jersey City was the next largest project to break ground.
Through the first nine months of 2020, single family starts were up 6%, but multifamily starts were down 12%. For the 12 months ending in September, single family starts were up 7%, while multifamily starts were down 5%.
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