The value of new construction starts in July increased 6 percent from June to a seasonally adjusted annual rate of $728.1 billion, according to Dodge Data & Analytics.
Residential building in July increased 8 percent, as multifamily housing rebounded after three consecutive monthly declines. Nonresidential building saw a 7-percent slide following its 14-percent hike in June, as both office buildings and hotels retreated from June’s elevated activity, outweighing a sharp rise for healthcare facilities in July. Overall, nonbuilding construction led the way for July’s increase.
During the first seven months of 2017, total construction starts on an unadjusted basis were $411.9 billion, down 1 percent from the same period a year ago.
July’s data lifted the Dodge Index to 154, compared to an upwardly revised 145 for June. After this year’s strong first quarter, the Dodge Index had receded 11 percent in the second quarter. July’s total construction gain brings activity back to within 2 percent of the first quarter’s pace.
“July’s increase means the third quarter began on a healthy note, which should help to maintain the up-and-down pattern on a quarterly basis that’s been present for construction starts over the past year,” says Robert A. Murray, chief economist for Dodge. “Within that up-and-down pattern there remains a modest upward trend, as it appears that construction starts are still in the process of reaching a peak, as opposed to having already reached a peak. Public works construction, after sluggish activity earlier in the year, is showing hesitant signs of improvement. It’s true that residential building is now seeing generally decreased activity for multifamily housing, but the monthly declines continue to be mixed in with monthly gains, such as what took place in July. For nonresidential building, growth is being supported by its institutional segment, while commercial building is leveling off due to varied behavior by its individual project types.”