Total construction starts increased 19 percent in March to a seasonally adjusted annual rate of $1.09 trillion, according to Dodge Construction Network.
Nonresidential starts rose 33 percent in March, nonbuilding starts increased 17 percent and residential starts moved 5 percent higher.
Total construction starts in the first quarter were 9 percent below the 2022 mark, according to Dodge. Residential starts through the first three months of the year were down 29 percent while nonresidential and nonbuilding starts grew 6 percent and 12 percent, respectively.
“Construction starts activity has yet to see the impact of tightening financial conditions in the wake of the failure of Silicon Valley and Signature Banks,” says Richard Branch, chief economist at Dodge. “Several large manufacturing projects are breaking ground, pushing nonresidential buildings higher, while a nascent recovery in single-family starts has been supporting residential growth. Construction starts began the year with gusto, but that is likely to erode as the year progresses, as seen by the declining trend in the Dodge Momentum Index, which tracks projects entering the earliest stages of planning.”
Nonbuilding
Nonbuilding construction starts gained 17 percent in March to a seasonally adjusted annual rate of $263 billion.
Miscellaneous nonbuilding was the only category to post a month-over-month loss. Environmental public works rose 35 percent, utility/gas plants gained 16 percent, and highway and bridge starts were up 13 percent.
Through three months of the year, nonbuilding starts were up 12 percent. Miscellaneous nonbuilding starts were up 43 percent, environmental public works rose 22 percent and utility/gas plants moved 8 percent higher. Highway and bridge starts gained 1 percent.
The largest nonbuilding projects to break ground in March were the $606 million I-35 Capital Express North Lanes in Austin, Texas, the $445 million Klamath River Renewal Project in Oregon, and the $375 million 360 MW Atrisco Solar Farm in Rio Rancho, New Mexico.
Nonresidential
Nonresidential building starts, meanwhile, increased 33 percent in March to a seasonally adjusted annual rate of $492 billion.
Manufacturing starts more than doubled over the month. Dodge says they once again were the driving force behind the gain, as three very large projects got underway. Without the projects, Dodge says total nonresidential starts would have only gained 3 percent.
Commercial starts rose 28 percent, with retail as the only category to fall, while institutional starts improved 11 percent due to a number of health care projects getting underway.
On a year-to-date basis through three months, Dodge says total nonresidential starts were 6 percent higher than the first three months of 2022. Institutional starts gained 21 percent, manufacturing starts were 1 percent higher and commercial starts were down 5 percent.
The largest nonresidential building projects to break ground in March were the $5.5 billion Hyundai EV plant in Ellabell, Georgia, the $3 billion Panasonic Energy North America Battery Manufacturing Plant, and the $780 million third phase of the BASF MDI chemical plant in Geismar, Louisiana.
Residential
Lastly, residential building starts increased 5 percent in March to a seasonally adjusted annual rate of $335 billion.
Single-family starts rose 4 percent, and multifamily starts increased 8 percent.
Through three months of 2023, total residential starts were down 29 percent. Single-family starts were 37 percent lower in that time and multifamily starts were down 12 percent.
The largest multifamily structures to break ground in March were a $400 million mixed-use project in Jamaica, New York, the $225 million Chestnut Commons Affordable Housing project in Cypress Hills, New York, and the $268 million Knox mixed-use development in Dallas.
Featured photo: iStock.com/kozmoat98
