The value of new construction starts in April fell 15% to a seasonally adjusted annual rate of $685.2 billion, pulling back following the 16% hike that was reported in March, according to Dodge Data & Analytics.

Steep declines were registered by two of the three main construction sectors. Nonbuilding construction, which is comprised of public works and electric utilities/gas plants, plunged 31% from its elevated March amount. Nonresidential building fell 18% in April after being boosted in March by groundbreaking for the $1.6 billion Toyota-Mazda automotive manufacturing facility in Huntsville, Ala., among other large projects. Nonresidential building in April did receive support from the start of the $1.3 billion new airport terminal project at Kansas City International Airport. Meanwhile, residential building in April decreased 1%, as a modest rebound for multifamily housing was outweighed by further slippage for single family housing.

During the first four months of 2019, total construction starts on an unadjusted basis were $224.5 billion, down 8% from the same period of 2018. On a 12-month moving total basis, total construction starts for the 12 months ending April 2019 held steady with the corresponding amount for the 12 months ending April 2018.

“The construction start statistics can be volatile on a month-to-month basis, and that’s certainly been true in March and April, as a 16% jump was followed by a 15% decline,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “Much of the volatility can be attributed to the presence or absence of large projects – in March there were ten projects valued each at $500 million or more that reached groundbreaking, while April saw only two such projects. Amidst this volatility, there are several trends about 2019 construction activity that are beginning to emerge. Overall construction activity continues to show deceleration around an up-and-down monthly pattern, with a varied performance by major construction sector … Nonresidential building is staying close to its pace of last year, helped by continued strength for office buildings, hotels, educational facilities and transportation terminals. The multifamily side of residential building is retreating, even with the occasional monthly upturn, while single family housing has not yet provided evidence that it can rebound from the slower pace that took hold toward the end of last year.”

News