Construction Starts Fall 13% in March, Dodge Data &amp; Analytics Says

Construction Starts Fall 13% in March, Dodge Data & Analytics Says

Construction starts dropped 13% in March from February’s level, to a seasonally adjusted annual rate of $633.3 billion, Dodge Data & Analytics reports.

In its latest monthly construction report, released on April 21, Dodge D&A also says that megaproject starts in February skewed the comparison.

If projects valued at more than $1 billion are excluded from both months' figures, March’s total is up 4% from February’s, Dodge D&A said. (ENR is part of Dodge D&A.)

Robert A. Murray, Dodge D&A chief economist, said in a statement: “The presence of unusually large projects will affect the month-to-month pattern for construction starts and that’s certainly been true during the early months of 2015.”

For example, February’s starts included an $8.4-billion liquefied natural gas export terminal in Louisiana, a $1.2-billion solar-energy project in California and a $3-billion ethane cracker and propane dehydrogenation facility in Texas.

March wasn’t devoid of megaprojects: a $2.3-billion highway project got under way in Florida during the month.

The Dodge Index for March was 134, compared with a revised 155 for February and 132 in January. The index for 2014 averaged 124. The 2000 level equals 100.

For a longer-range look at construction trends, Dodge D&A said that starts for the first quarter of 2015 rose 28% from the same period last year. Those figures aren’t adjusted for seasonal variations.

Looking at March's month-over-month results for construction segments, nonresidential building dipped 19% after a 43% jump in February, as manufacturing, commercial building, offices, and warehouses all posted double-digit decreases.

Retail facilities, on the other hand, climbed 13% last month.

Nonbuilding projects’ 22% decline was due to a 73% drop in the electric utility-gas plant segment, Dodge D&A said.

Public works, however, was a bright spot, including a 30% gain in highway and bridge construction, paced by Florida’s $2.3-billion Interstate 4 upgrade.

Murray said, “Although there’s concern that public works construction will be dampened by the uncertainty caused by the soon-to-expire federal transportation legislation, a healthy amount of highway and bridge work has reached the construction-start stage so far in 2015.”

The current highway-transit authorization measure lapses May 31.

Miscellaneous public works, which includes pipelines, surged 86% last month and the river-harbor and water supply categories recorded double-digit increases.

Residential construction was about flat with February at a $251.4-billion annual rate, Dodge D&A said.

Multifamily projects slipped 4% after a 45% gain in February.

Tom Ichniowski has been writing about the federal government as ENR’s Washington Bureau Chief since the George H.W. Bush administration, and he has covered at least five major highway bills. A recognized expert on government policy on infrastructure and regulation, Tom is also a Baltimore native and Orioles fan who grew up rooting for Brooks and Frank Robinson. He is a graduate of Columbia College and Columbia’s graduate school of journalism, where he once used “unrelentless” in a headline.

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