The Dodge Construction Network (DCN) reports that total construction starts increased by 10% in May, buoyed by significant nonbuilding gains. Nonresidential and residential starts declined by 2% and 7%, respectively.

Total construction starts were up 11% compared to the first five months of 2023. Residential starts rose by 16%, and nonresidential building starts increased by 3%. Year-to-year, total construction starts were up 2% from May 2023 to May 2024. Nonresidential building starts decreased by 7%, and residential starts climbed by 5%.

“Even though May’s gain in construction starts was mainly due to a handful of large projects, the data highlights that there is some grassroots demand building in the market,” says DCN chief economist Richard Branch. “Single-family starts, in particular, have risen in eight of the last 12 months despite high mortgage rates. Growth in single-family will incentivize further demand for retail, health, and education starts, among others, and the stability in the Dodge Momentum Index.”

Nonresidential

Nonresidential building starts fell 2% in May to a seasonally adjusted annual rate of $415 billion. Manufacturing starts lost 14% following a strong April, while institutional starts dropped 6%. Commercial starts increased by 10% due to gains in warehouse, office and parking starts. On a year-to-date basis through May, total nonresidential starts were up 3%. Institutional starts were 20% higher. Commercial starts were down 5%, and manufacturing starts were 19% lower.

The largest nonresidential building projects to break ground in May were the $2.1 billion Tennessee Titans Football Stadium in Nashville, the $1 billion Gotion EV Battery plant in Manteno, Illinois, and the $875 million General Motors Battery Cell factory in New Carlisle, Indiana.

Residential

Residential building starts decreased 7% in May to a seasonally adjusted annual rate of $365 billion. Single-family starts rose 2%, while multi-family starts lost 25%. On a year-to-date basis, total residential starts were 16% higher. Single-family starts improved 29%, and multi-family starts were 5% lower on a year-to-date basis.

The largest multi-family structures to break ground in May were the $200 million The Atlantic Club in Long Branch building in Long Branch, New Jersey, the $150 million mixed-use project at 880 Atlantic Avenue in Prospect Heights, New York, and the $150 million Tuscany at Gabriella Pointe in Gilbert, Arizona.

Regionally, total construction starts in May rose in the Midwest and the South but fell in the Northeast and West.

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