According to data released by Dodge Data & Analytics, new US construction starts in December fell by 16% to a seasonally adjusted annual rate of US$568.2 billion. The decline follows the 13% increase reported for total construction starts in November, when activity reached its highest level in 2014. The nonresidential building and nonbuilding construction sectors witnessed substantial percentage declines in December, compared to their robust November amounts. However, residential building saw a modest gain in December with the help of further growth by multifamily housing. For 2014 as a whole, total construction starts increased by 7% to US$575.3 billion, continuing the pattern of moderate expansion for total construction starts reported during the previous two years (2012 up 10% and 2013 up 9%).
Nonresidential building in December fell 23% to US$196.6 billion (annual rate), following its 32% increase in the previous month. For 2014 as a whole, nonresidential building climbed 17% to US$208.2 billion, following the 11% gain that was reported in 2013.
Residential building in December improved 3% to US$247.3 billion (annual rate). The 2014 amount for residential building was US$227.8 billion, up 8%, and a much smaller increase than what was reported in 2012, up 31%; and 2013, up 26%.
Nonbuilding construction in December plummeted 32% to US$124.3 billion (annual rate), following its 21% hike in November. For the full year 2014, nonbuilding construction dropped 6% to US$139.2 billion, which followed the 9% decline reported for 2013.
"The continued expansion for construction starts in 2014 carried several notable features," stated Robert A. Murray, Chief Economist for Dodge Data & Analytics. "The nonresidential building sector showed more growth for commercial building, the first increase for institutional building after five years of decline, and a surge of manufacturing plant projects. Residential building was supported by the strengthening multifamily market, but was not able to offer the same upward push as in 2012 and 2013 given the flat performance by single family housing. Nonbuilding construction showed a slower pace for public works, and while electric utilities lost further momentum the decline was much less severe than in 2013. Looking ahead to 2015, nonresidential building should benefit from more private investment directed at commercial building and more financing for school construction given the passage of recent bond measures. However, the rate of increase for nonresidential building will be dampened by a slower pace for energy-related manufacturing projects. Residential building should see more multifamily housing while renewed growth for single family housing will need the banking industry to provide potential homebuyers with greater access to home mortgages. Nonbuilding construction will be helped by the fact that federal spending levels for fiscal 2015 were set in December, but Congress needs to address the stopgap federal transportation legislation that expires at the end of May."
Adapted from press release by Rosalie Starling
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