July Construction Starts Increase 2 Percent

Glass Magazine
August 26, 2019
COMMERCIAL, RETAIL, FABRICATION

At a seasonally adjusted annual rate of $849.6 billion, new construction starts in July advanced two percent from the previous month, according to Dodge Data & Analytics. This marked the third consecutive monthly increase for total construction starts, following gains of 10 percent in May and nine percent in June. Nonresidential building in July settled back four percent, following a 16 percent jump in June that included the start of the $1.1 billion Terminal 5 expansion at Chicago’s O’Hare International Airport. Through the first seven months of 2019, total construction starts on an unadjusted basis were $459.3 billion, down 6 percent from the same period a year ago.

The July statistics raised the Dodge Index to 180 (2000=100), compared to 176 in June, and marked the highest level for the Dodge Index so far during 2019. The latest two months have seen the Dodge Index move above its 2018 monthly average at 172.

“The strengthening volume of construction starts in recent months indicates that activity is moving closer to the levels reported in 2018, following a sluggish performance at the outset of 2019,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “Recent support has come from those construction sectors that are partially influenced by public funding, namely institutional building with its June gain and now public works with its July gain. This is typically what takes place during the latter stages of a construction expansion, which also helps to keep the initial stage of a broad-based slowdown to stay moderate. ... The commercial building segment so far in 2019 has been mixed—office construction remains on track for a modest gain, but there’s also been generally depressed activity for store construction and some slippage for hotel and warehouse starts.”

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