Dodge Data & Analytics’ latest Construction Starts release shows total construction starts fell 2% in February, putting them at a seasonally adjusted annual rate of $797.3 billion. Nonbuilding construction starts posted a solid gain after rebounding from a weak January, however, residential and nonresidential building starts declined, leading to a pullback in overall activity. The Dodge Index fell 2% in February, to 169 from January’s 171.
While nonbuilding construction starts did increase in February, to a seasonally adjusted annual rate of $200.3 billion, nonresidential building starts fell 7% to a seasonally adjusted annual rate of $208.1 billion. Institutional starts dropped 8% during the month despite a strong pickup in healthcare, and warehouse starts also fell back during the month following a robust January. Those drops offset gains in office and hotel starts, bringing the overall commercial sector down by 8%.
For the 12 months ending February 2021, nonresidential building starts dropped 28% compared to the 12 months ending February 2020. Commercial starts declined 30%, institutional starts were down 19%, and manufacturing starts slid 58% in the 12 months ending February 2021.
The largest nonresidential building projects to break ground in February were Ohio State University’s $1.2 billion Wexner Inpatient Hospital Tower in Columbus, Ohio, ApiJect Systems’ $785 million Gigafactory in Durham, N.C., and Sterling EdgeCore’s $450 million data center in Sterling, Va.
Though the numbers are down overall, the year is still young and there’s time for things to change for the better.
“With spring just around the corner, hope is building for a strong economic recovery fueled by the growing number of vaccinated Americans,” said Richard Branch, chief economist for Dodge Data & Analytics. “But the construction sector will be hard-pressed to take advantage of this resurgence as rapidly escalating materials prices and a supply overhang across many building sectors weighs on starts through the first half of the year.”