The value of new construction starts in September dropped 5 percent from the previous month to a seasonally adjusted annual rate of $523.7 billion, according to Dodge Data & Analytics. The Dodge Index was 111 for the month, down from 117 in August.

Both nonresidential building and housing saw decreased activity, though through the first nine months of 2015, total construction starts on an unadjusted basis were $497.4 billion, up 12 percent from the same period a year ago.

construction-starts-september-2015“The level of construction starts was subdued during both August and September, retreating from the strength shown earlier in the year,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “… For nonresidential building, the volume of construction starts soared 24 percent in 2014. While activity has leveled off in the near term for its commercial and institutional segments, much of this year’s softness for nonresidential building is related to a decreased amount of manufacturing plant construction, adversely affected by the sluggish global economy and falling energy prices.

“Economic factors that influence the commercial and institutional segments, such as receding vacancies and funding support from state and local bond measures, remain positive. For residential building, the month-to-month variation has reflected the pattern of multifamily housing, which in August and September fell back from robust activity in June and July. Multifamily housing is still on track for double-digit growth in 2015.”

Nonresidential building in September dropped 4 percent to $152.9 billion (annual rate). The institutional categories as a group fell 13 percent, as educational facilities retreated 20 percent from the elevated amount reported in August. Also registering September declines were public buildings, down 42 percent; and religious buildings, down 31 percent. Amusement and recreational facilities advanced 12 percent in September, and healthcare facilities edged up 2 percent.

The commercial building group in September improved 4 percent, regaining some ground after a 24-percent plunge in August. Office construction climbed 20 percent, and hotel construction in September increased 19 percent.

Residential building, at $236.9 billion (annual rate), dropped 11 percent in September. Multifamily housing, which has shown some volatility on a month-to-month basis, plunged 30 percent from its August amount. Just two projects valued at $100 million or more reached groundbreaking in September, compared to eight multifamily projects valued at $100 million or more that reached groundbreaking in August, and 16 such projects that were entered as July starts. In September, New York City continued to be the leading metropolitan area in terms of the dollar amount of multifamily construction starts, but after reaching a peak in June, New York’s multifamily activity has retreated.

The 12-percent increase for total construction starts on an unadjusted basis during the first nine months of 2015 came from growth for residential building and nonbuilding construction, while nonresidential building was down moderately after posting strong gains in 2014. Residential building climbed 17 percent year-to-date, with multifamily housing up 26 percent.

Nonresidential building year-to-date retreated 7 percent, due primarily to a 30-percent plunge for the manufacturing building category. The commercial building and institutional building groups registered slight declines of 2 and 3 percent, respectively. By major region, total construction starts during the January-September period of 2015 were as follows: South Central, up 24 percent; Northeast, up 22 percent; South Atlantic, up 9 percent; West, up 4 percent; and Midwest, up 2 percent.