Nonresidential was among the three main industry sectors that saw a decrease in new construction starts in August. Starts for the month dropped 11 percent to a seasonally adjusted annual rate of $554.5 billion, according to Dodge Data & Analytics.

Nonresidential building and housing retreated from an improved July pace, while nonbuilding construction continued to recede. The August statistics lowered the Dodge Index to 117, down from the 133 reported for both June and July.

“While August construction starts were notably subdued compared to recent months, it’s useful to keep in mind that construction starts on a monthly basis will often show an up-and-down pattern, and the year-to-date statistics depict an expansion that’s still proceeding,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “For nonresidential building, the early months of 2015 did show some deceleration for the commercial categories, consistent with the slower pace of economic growth in the first quarter, and manufacturing plant construction is now retreating after the exceptional amount of energy-related plant investment in 2014.”

He adds, “At the same time, market fundamentals for commercial building (namely rents and occupancies) are still positive, and commercial building projects at the planning stage have recently increased. This suggests that the pace of commercial building starts, while lackluster in August, should soon pick up.”

Nonresidential building in August dropped 16 percent to $160.7 billion (annual rate). The commercial building categories as a group were weaker for the month, sliding 24 percent. Hotel construction in August plunged 35 percent, and office construction fell 34 percent. The institutional building group in August dropped 11 percent, as healthcare facility construction fell 28 percent, retreating from its improved activity during the previous four months. On the plus side, the educational facilities category in August advanced 17 percent.

For residential building, the August decline was due to a slower pace for multifamily housing after a strong July, and the upward trend for this sector remains intact. Residential building, at $265.5 billion (annual rate), fell 8 percent in August. Multifamily housing retreated 23 percent after climbing 22 percent in July to its strongest level so far in 2015. The August pace for multifamily housing was still 21 percent above the average monthly amount reported during 2014.