March Starts Advance 11%

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March Starts Advance 11%

New construction starts in March jumped 11% to a seasonally adjusted annual rate of $758.2 billion, according to Dodge Data & Analytics. The substantial gain followed modest declines in January (down 2%) and February (down 3%), and brings the pace of total construction starts to the highest level over the past six months. The nonbuilding construction sector, comprised of public works and electric utilities/gas plants, soared 73% in March, boosted by the start of several very large projects. These included the $3.5 billion Mountain Valley Pipeline expansion in West Virginia and Virginia, the $1.1 billion I-405 highway project in Orange County CA, the $855 million Grand Parkway highway project in Houston TX, and a $400 million wind farm in Kansas. At the same time, both nonresidential building and residential building eased back slightly in March, with respective declines of 1% and 2%. During the first three months of 2018, total construction starts on an unadjusted basis were $167.3 billion, down 7% from last year (which included exceptionally strong amounts for airport terminals and natural gas pipelines). On a twelve-month moving total basis, total construction starts for the twelve months ending March 2018 were up 1% from the twelve months ending March 2017. The commercial categories as a group retreated 13% following a 17% increase in February, with declines reported for four of the five structure types. Hotel construction dropped 40% after being boosted in February by the start of three large projects, including the $250 million Loew’s Kansas City Convention Hotel in Kansas City MO. In contrast, the largest hotel project entered as a March start was the $78 million Jimmy Buffett Margaritaville Hotel in Nashville TN. Office construction in March dropped 16% after being lifted in February by the start of such projects as a $600 million Google data center in Clarksville TN and the $220 million Cerner Corporation Campus in Kansas City MO. Still, March did include groundbreaking for several noteworthy office building projects, led by a $600 million Google data center in Pryor OK, the $245 million U.S. Citizenship and Immigration Services building in Suitland-Silver Hill MD, the $233 million office portion of the $300 million One Willoughby Square mixed-used development in Brooklyn NY, and the $137 million BMO Bank office tower in Milwaukee WI. Store construction in March retreated 20%, while commercial garage construction slipped 7%. Warehouse construction was the one commercial structure type to report a March gain, rising 37% with the help of a $130 million Amazon fulfillment center in Rialto CA.