Construction Starts Increase in June
In an article published July 16, 2020, the chief economist for Dodge Data & Analytics (DD&A) reported that new construction – or construction starts – “increased 6% in June to a seasonally adjusted annual rate of $641.4 billion.” This gain follows a 3% gain between April and May and comes after declines brought about by the reaction to COVID-19 in March and April, an event DD&A characterizes as the shortest and steepest recession in U.S. history.
As shown in the following DD&A chart, nonresidential building starts gained 6% in June. Starts in the nonbuilding sector jumped an impressive 27% for a seasonally adjusted annual rate of $191.1-billion. Residential starts continue to lag, but, in a similar construction summary article in June, DD&A posited that the low point for the economy was May and forecasted that modest gains are coming over the short term.
Dodge Data & Analytics, July 2020
According to DD&A, the May and June gains were powered by a few very large nonbuilding projects, including:
- Widening of Interstate 635 in Dallas, TX ($1.3-billion)
- Lynnwood Link Extension in Lynwood, WA ($789-million)
- Widening of I-405 in Seattle, WA ($705-million)
- Federal Way Link Extension in Seattle, WA ($1.4-billion)
- Golden Hills Wind Project in Sherman County, OR ($600-million)
- Athos Solar Facility in Riverside County, CA ($438-million)
$2.0-billion in solar and wind power projects and a 14% gain in new utility/gas plant construction helped push the increase.
Some notable projects contributed to the May and June gains in nonresidential (commercial, institutional and industrial) starts:
- SDI Steel Plant Complex in Sinton, TX ($950-million) »
- Fig + Pico Hotel Towers in Los Angeles, CA ($355-millon)
- Wolf Point South (Salesforce) Tower B in Chicago, IL ($360-million)
- SeaTac international Airport renovation in Seattle, WA ($294-million
- Women’s and Children’s Hospital Tower in San Antonio, TX ($384-million)
- Aligned Energy Data Center in Ashburn, VA ($306-million)
As for residential building construction, both single-family and multifamily starts were lower. However, a few large multifamily structures broke ground in May and June to make the picture a little brighter, including:
- 545 Vanderbilt Avenue mixed-use development in Brooklyn, NY ($180-million)
- 354 N Union apartment tower in Chicago, IL ($150-million) ↓
Pappageorge Haymes Partners/Onni Group
- Ripley II / Solaire 8200 Dixon development with apartments, food hall and market in Silver Spring, MD ($150-million)
- Mixed-use project in Jersey City, NJ ($170-million)
- Flower Mart Apartments in Mountain View, CA ($113-million)
- 509 4th Avenue project in Brooklyn, NY ($100-million)
Although DD&A says the construction sector hasn’t fully entered recovery, both the June and July news articles suggest construction starts will continue to post gains in the months to come as the economy continues to recover.
It’s not a question of “if” but rather “when.” Projects are looming on the horizon like a giant wave, and the next construction boom is coming. You can prepare your company for the wave of construction projects ahead by watching three complimentary Applied Software on-demand webinars in the series, “Nine Tips to Better Productivity.” Learn about safety performance, analytics, scheduling, collaboration, trend review, and crew building.