Construction Starts Climb in March

Construction starts rose 19% in March, according to Dodge Construction Network, with nonresidential starts rising 33%, nonbuilding starts increasing 17% and residential starts moving 5% higher. 

In part, the good news may be attributable to the absence of collateral damage-yet-from the failure of the California banks. “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,” said Richard Branch, Chief Economist for Dodge Construction Network.

In addition, total construction starts were 11% higher than the 12 months ending a year ago, and nonresidential and nonbuilding starts were 33% and 21% higher, respectively. Residential starts lost 11%, however.

What type of nonresidential buildings are moving higher? Several large manufacturing projects, according to the report. Otherwise, there were other gains in March such as environmental public works rose 35%, utility/gas plants gained 16% and highway and bridge starts climbed 13%.  The year-to-year results for Q1 also climbed to 12% with the environmental public works up 22%, utility/gas 8% up and highway and bridge up but a smaller 1%.

Among specific projects worth noting that broke ground in March are the $600 million I-35 Capital Express North Lanes in Austin; the $445 million Klamath River Renewal Project in Oregon; and the $375 million 360 MW Atrisco Solar Farm in Rio Rancho, N.M. Some nonresidential building starts also increased in March with manufacturing doubling from the prior month.

The largest nonresidential building projects to move forward in March were the $5.5 billion Hyundai EV plan in Ellabell, Ga.; the $3 billion Panasonic Energy North American Battery Manufacturing Plant and the $780 million third phase of the BASF MDI chemical plant in Geismar, La.

Residential building starts increased 5% in March with single-family homes rising a smaller 4% and multifamily climbing more to reach 8%. But on a year-to-date look at the three months, total residential starts were down 29%. But there’s some good news in the form of some big projects breaking ground. A $400 million mixed-use project in Jamaica, N.Y, is going ahead; along with a $225 million Chestnut Commons Affordable Housing project in Cypress Hills, N.Y.,  and a $268 million Knox mixed-use development in Dallas. And regionally, total construction starts in March rose in all five regions.