12-26-18

Some important points in the Construction Starts data that show how important it is to keep track of long-term trends. The month to month reports can often make the data look much different than the trend. Most recent data here is the November report issued Dec 20 by  Dodge Data.

Here’s the spending forecast that shows how starts are impacting construction spending 2019 construction economic forecast nonresidential Dec 2018

Manufacturing construction starts in Nov plunged 71%.

Manufacturing starts in Oct were up 180% and June was up 1300%, 2 of top 5 best months ever. Starts are on track to finish the year up 20%+, 2^nd best year ever.

Transportation terminals construction starts in Nov plunged 73%.

Transportation terminals had a blockbuster year in 2017, up 125% with 3 of the best ever monthly starts. Oct 2018 was 4^th best starts ever. 2018 will finish as 2^nd best year ever.

Amusement/Recreation starts in Nov dropped 18%.

Amusement/Rec starts in October was the 3^rd best month ever recorded.  Nov is still near one of the best ever. Amuse/Rec starts in 2018 will total the best year ever recorded up 25% from 2017, up 100% in 5 years.

Educational construction starts in Nov dropped 6%.

Educ starts have declined 3 months in a row, but that is from the highest 4 months ever recorded. 2018 construction starts are on track to finish up 13%, the best year ever, averaging gains of 11% a year for last 5 years. Starts from the last five months of 2017 posted the highest 5mo total in at least seven years, 13% higher than the next best 5mo

Healthcare construction starts are down 8% in Nov.

Healthcare starts could finish 2018 down 3%, but on average are up 4%+/year for the last 5 years. Starts are near the all-time high reached last year.

Office construction starts in Nov down just 2%.

Office construction starts declined 4 of last 5 months, but June, Oct and Nov were the 3 best months in 10 years. Office starts are on track to finish 2018 up 15%, best year ever, up over 100% in last 5 years.

Commercial/Retail starts have been increasing every year since 2010 but starts in 2018 are flat vs 2017 Starts are at a peak but after 5 years of 15%-20% growth/year are up only 4% in the last two years.

Commercial starts are seeing strong gains from distribution centers (warehouses which are in commercial spending). The decline in retail stores is being hidden by the increase in warehouses, which are at an all-time high. Stores are down 10% from the peak in 2016. Warehouses are still up only 4% in 2018 but increased 500% from 2010 to 2017.

Highway and Bridge construction starts fell 33% in Nov.

Highway starts in October were the highest since January 2014. Highway starts have increased on average 3%+/year the last 7 years. Starts in 2018 reach an all-time high.

Environmental Public Works includes Sewerage projects, Water Supply and Conservation, or dams, water resource and river/harbor projects. New starts for all these types projects declined from 2014 through 2017. In 2018, through November, Water Supply posted 5 down months, Sewerage post 6 down months and Conservation posted 7 down months. Yet all are forecast to finish 2018 with gains.

More on Construction Starts

Behind The Headlines – Construction Starts is Not Spending