Total Construction Starts Soar in October

The Dodge Construction Network reports that total construction starts pushed 16% higher in October, to a seasonally adjusted annual rate of $1.01 trillion. Nonresidential building starts gained 29% and nonbuilding moved 52% higher in October, while residential starts lost 8%. The month’s large gains resulted from the start of three large projects: two massive manufacturing plants and an LNG export facility. Without these projects, total construction starts would have fallen 6% in October.

“Economic growth has resumed following the third quarter’s Delta-led slowdown. However, the construction sector’s grip on growth remains tenuous,” stated Richard Branch, chief economist for Dodge Construction Network. “Long term, construction starts should improve, fed by an increase of nonresidential building projects in the planning pipeline and the recent passage of the infrastructure bill. Both will provide meaningful support and growth to construction in the year to come. This expectation, however, must be tempered by the significant challenges facing the industry: high prices, shortages of key materials, and the continued scarcity of skilled labor. While healing from the pandemic continues, there’s still a long road back to full recovery.”