Construction Starts Show 'Little Momentum'
Interest rates, labor shortages, and material prices have all had an impact.
A singular large liquid natural gas facility led non-residential construction starts 38% higher in July, but overall, total construction starts are 7% off year over year given “little forward momentum” in that time, according to the Dodge Construction Network.
If subtracting the LNG facility – a $12 billion first phase of the Rio Grande LNG facility in Brownsville, Texas – non-residential starts would have fallen by 7%.
The start of the Buffalo Bills’ new stadium’s construction in June sunk non-building, miscellaneous starts by 71% while highway and bridge starts lost 4% in the month.
“Construction starts have plateaued and are making little headway,” says Richard Branch, chief economist for Dodge Construction Network, in prepared remarks. “Higher interest rates, labor shortages, and material prices continue to impact the flow of construction starts — resulting in little forward momentum over the last 12 months.
“The lag in nonresidential building projects entering the planning stage will slow starts as the year progresses, which should be offset by rising infrastructure activity.”
Residential building starts did pop by 20% in July and multifamily starts soared by 62%.
The $1 billion Clarkson Square condo and apartment building in New York City broke ground as the biggest multifamily project. A residential tower in Charlotte and a tower in Hallandale, Fla., were next.