New construction starts in June climbed 11 percent to a seasonally adjusted annual rate of $896.3 billion, according to Dodge Data & Analytics. The increase marked the second double-digit gain in a row, following the 15-percent hike that was reported for May. Boosting activity in June was a sharp 57-percent advance for nonresidential building, which benefitted from the start of two massive manufacturing plant projects and two massive office building projects. Residential building in June grew 4 percent, helped by growth for multifamily housing.

The nonbuilding construction sector (public works and electric utilities) retreated 28 percent in June, pulling back after the sharp 37-percent increase reported in May that reflected the start of several large natural gas pipelines and rail-related projects.

Through the first six months of 2018, total construction starts on an unadjusted basis were $395.7 billion, up 1 percent from the same period a year ago. If the volatile electric utility/gas plant category is excluded, total construction starts during the first six months of 2018 would be up 3 percent relative to last year.

“The monthly pattern for construction starts will often reflect the presence or absence of very large projects, and after May received a lift from unusually large projects, it was even more true in June,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “Following the lackluster activity in April, the strength shown during May and June enabled the second quarter average for total construction starts to be up 3 percent from the first quarter, which itself was up 2 percent from the final three months of 2017. On that basis, one can say that the expansion for construction starts continued at a modest pace during the first half of 2018. At the same time, it’s not expected that July will get the same support from large projects that took place in June.”

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