Construction Starts Increase in June

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August 14, 2020 | All

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.

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Dodge Data & Analytics, July 2020

According to DD&A, the May and June gains were powered by a few very large nonbuilding projects, including:

$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:

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.


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