January Starts Recover 2%

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January Starts Recover 2%

New construction starts in January rose 2% to a seasonally adjusted annual rate of $722.5 billion, according to Dodge Data & Analytics. The slight gain followed the loss of momentum that was reported towards the end of 2018, with total construction declines of 7% in November and 10% in December. Each of the three main construction sectors in January registered modest growth. Residential building climbed 4%, lifted by a rebound for multifamily housing. Nonresidential building edged up 1%, reflecting a stronger pace for its commercial building segment including large office projects in Reston VA, Houston TX, Boston MA, Austin TX, and Seattle WA. Nonbuilding construction also edged up 1%, helped by the start of a $1.0 billion natural gas pipeline in Oklahoma and several large electric utility projects. On an unadjusted basis, total construction starts in January were $51.5 billion, down 12% from the same month a year ago. On a twelve-month moving total basis, total construction starts for the twelve months ending January 2019 held steady with the corresponding amount for the twelve months ending January 2018. The commercial building categories as a group rose 4% in January. Office construction picked up the pace, climbing 18%, and featured groundbreaking for these large projects – the $550 million Reston Gateway office complex (Block A and Block B) in Reston VA, the $350 million Hines office tower in Houston TX, the $225 million Amazon at Seaport Square office building in Boston MA, the $180 million Oracle office complex in Austin TX, and the $150 million Amazon Urban Treehouse office building in Seattle WA. Hotel construction in January rose 10%, helped by the start of the $245 million Westin Anaheim Resort Hotel in Anaheim CA, while the commercial garage category advanced 21%. Limiting the January increase for the commercial building group were declines for warehouses, down 13%; and store construction, down 24%. Despite its January decline, the warehouse category did include the start of several large projects, including a $95 million warehouse complex in Kenosha WI and the $90 million Savannah Port Logistics Center in Pooler GA. Manufacturing plant construction in January grew 9%, boosted by the start of a $125 million steel plate mill in Baytown TX.