NEW YORK, N.Y. – The value of new construction starts in September decreased a slight 2 percent to a seasonally adjusted annual rate of $703.7 billion, according to Dodge Data & Analytics. This follows the 22 percent jump for total construction starts in August, which witnessed the highest monthly pace for construction starts so far in 2016. Nonresidential building showed further strength in September, exceeding its elevated August amount. The lift for nonresidential building in September came from the start of two very large office towers in New York, New York with a combined construction start cost of $3.5 billion, as well as eight large hospital projects that together summed to $2.2 billion. Through the first nine months of 2016, total construction starts on an unadjusted basis were $506.7 billion, trailing the same period a year ago by 3 percent. The September data produced a reading of 149 for the Dodge Index (2000=100), down from an upwardly revised 152 for August. September was still fairly high by recent standards, coming in 6 percent above the average of the previous eight months.
Nonresidential building in September increased 5 percent to $282.3 billion (annual rate), following the 43 percent surge in August which benefitted from the start of a $3-billion petrochemical plant in Louisiana and the $1.7-billion Wynn Casino in Everett, Massachusetts. The institutional side of the nonresidential building market advanced 8 percent in September. Much of the lift came from a strong volume for healthcare facilities which climbed 57 percent.
The 3 percent decline for total construction starts on an unadjusted basis during the first nine months of 2016 was due to a mixed pattern by major sector. Nonresidential building year-to-date was down a slight 2 percent, with commercial building up 10 percent. By geography, total construction starts during the January-September period of 2016 revealed these changes compared to the same period a year ago – the Midwest, up 9 percent; the South Atlantic, up 7 percent; the West, up 5 percent; the Northeast, down 5 percent and the South Central, down 22 percent (reflecting this region’s comparison to last year which included several massive liquefied natural gas export terminals).