Positive November construction statistics raised the Dodge Index to 143, up from a revised 127 for October and marking the strongest month so far in 2014, according to Dodge Data & Analytics. At a seasonally adjusted annual rate of $677.8 billion, new construction starts in November climbed 13 percent from the previous month.
Nonresidential building had a particularly strong month, lifted by the start of two massive manufacturing plants and an airport terminal redevelopment. For the first 11 months of 2014, new construction starts on an unadjusted basis were $530.8 billion, up 7 percent from the same period a year ago.
“After the sluggish activity witnessed at the outset of 2014, new construction starts have generally strengthened, showing an up-and-down pattern around a rising trend, with November coming in especially strong,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “While residential building has decelerated in 2014, due to the pause by single family housing, the nonresidential building sector has assumed the leading role in keeping the construction expansion going.”
Nonresidential building in November soared 32 percent to $256.7 billion (annual rate)—a substantial boost coming from a 253-percent increase for the manufacturing plant category. If the manufacturing plant category is excluded, nonresidential building in November would have still shown a moderate gain, rising 10 percent. The commercial building group in November grew 7 percent, resuming its upward track after easing back in the previous two months. Hotel construction posted a 15-percent November gain, and office construction advanced 7 percent.
During the first 11 months of 2014, nonresidential building climbed 17 percent relative to the same period a year ago. Manufacturing plant construction surged 82 percent year-to-date, pushed upward by the large projects in November as well as numerous energy-related projects that were entered earlier in 2014. Residential building in November, on the other hand, fell 6 percent to $238.5 billion (annual rate). Multifamily housing retreated after its strong October performance, sliding 21 percent. Despite the decline, there were still a substantial number of large multifamily projects that reached groundbreaking in November, including 11 projects valued at $100 million or more.