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Total Construction Starts Increase 2 Percent
Residential Subgroup Alone Up 5 Percent


Residential construction -- the single-family sector in particular -- helped push the Dodge Index higher in January.

Residential construction went up moderately in January, but total construction starts was offset by drops in the nonresidential and nonbuilding sectors.

As a result, the value of all construction starts grew 2 percent month-over-month, and the Dodge Index for January increased to 129 from 127. (The Dodge Index was started in 2000 with the number 100 as its benchmark.)

The value of all building starts in January was $607.9 billion, Dodge Data and Analytics reports.

Residential construction advanced 5 percent for the month, and the sector was helped greatly by a 6 percent gain in single-family housing.

"January's improved pace for single-family housing may be the initial sign that it's moving beyond the lengthy plateau that took hold during the second half of 2015," Robert A. Murray, chief economist for Dodge Data said. "Admittedly, though, the winter readings on housing can be volatile and more monthly gains are needed before it's possible to say that growth for single family housing is being re-established."

The multifamily sector increased 2 percent, after jumping 22 percent in December. Nine multifamily projects, each valued at $100 million or more, broke ground in January. Four of those are being built in New York City, Chicago, Seattle and San Francisco.

Nonresidential activity declined 1 percent for the month. Health care facilities declined 20 percent, and the amusement-recreation segment dropped nearly 50 percent. Transportation terminals and religious facilities each shed 35 percent. But educational facilities grew 17 percent, and the commercial sector expanded by 3 percent. Office buildings jumped by nearly 30 percent; warehouses gained 17 percent; and hotels expanded by 14 percent.

"The construction industry, as shown by the construction start statistics, seems to be gradually regaining upward momentum," Murray said. "Last year, construction activity proceeded at a healthy clip during the first half, followed by a 20 percent drop in the third quarter and then a slight 1 percent rebound in the fourth quarter. January's modest gain for construction starts is consistent with what was shown at the end of last year."

The nonbuilding segment dropped 2 percent, as the electric utility and gas plant category fell 18 percent, but the highway-bridge group increased nearly 20 percent, and sewer and hazardous waste construction surged 68 percent. Total construction starts dropped 14 percent on a year-over-year basis, with residential building up 13 percent; nonresidential construction down 5 percent; and nonbuilding activity showing a 45 percent drop.

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July 21, 2019, 1:13 pm PDT

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