New construction starts in May increased 5 percent from April at a seasonally adjusted annual rate of $636.7 billion, according to Dodge Data & Analytics.

Much of the growth came from the nonbuilding construction sector. Residential building edged up slightly in May, as multifamily housing bounced back from its subdued April performance. However, nonresidential building in May retreated, sliding for the second month in a row after the elevated activity reported in March.

During the first five months of 2016, total construction starts on an unadjusted basis were $256.7 billion, down 12 percent from the same period a year ago. The May statistics raised the Dodge Index to 135 up from 129 in April. The index had shown moderate improvement during February and March, averaging 141, before slipping back in April.

“The construction start statistics have shown annual increases since 2010, including a 10-percent gain in 2015, although the month-to-month pattern has been frequently uneven,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “This up-and-down behavior continues to be present in 2016, with May seeing a partial rebound after the setback in April.

“In addition, the year-to-date comparisons in early 2016 relative to last year have been complicated by the fact that the first half of 2015 witnessed elevated levels arising from a number of exceptionally large projects (defined as projects valued at $1 billion or more). There were considerably fewer such projects during the second half of 2015, and this lower base should enable the year-to-date comparisons to improve as 2016 proceeds.”

Residential building, at $272.5 billion (annual rate), improved 1 percent in May. The multifamily side of the housing market provided the upward push, increasing 15 percent. There were eight multifamily projects valued at $100 million or more that reached groundbreaking in May, compared to five such projects in April.

Nonresidential building in May decreased 6 percent to $171.2 billion (annual rate), marking the second straight monthly decline after the heightened activity in March. The commercial building categories as a group experienced a 9-percent shortfall in May. Hotel construction, which had been particularly strong during the initial months of 2016, fell 22 percent. Office construction in May dropped 11 percent, and both stores and warehouses stayed close to their April levels, posting small declines of 1 and 3 percent respectively. The manufacturing plant category in May retreated 37 percent.

The institutional side of the nonresidential building market held steady in May. The educational facilities category rose a moderate 4 percent, and healthcare facilities increased 7 percent. On the negative side, transportation terminal work slipped 9 percent in May, and amusement-related construction fell 13 percent.