Construction starts fell back 2% in August on the heels of a 6% increase in July. Total construction starts for the first five months of 2017 came to $481.7 billion, down 1% from the same period a year ago. From July to August, nonresidential construction grew 14%, residential building decreased 1%, and nonbuilding construction dropped 24%.
The sharp decline in the nonbuilding construction in August followed a 26% gain in July, and largely reflects lower activity in the public works and power plant categories.
The increase in nonresidential building in August was partly attributable to advances in the institutional building categories (+27%), led by a 174% surge in the transportation terminal category. The commercial categories also rose 11% in August.
The slight decrease in residential building in August was driven by a 12% drop in multifamily housing. Single family housing grew 4% in August, and thus showed modest improvement compared to the preceding four months.
Compared with the same period last year, total new construction starts by region for the first eight months of 2017 performed as follows: South Central, down 8%; Northeast, up 9%; Midwest, down 14%; West, up 3%; and South Atlantic, up 5%.
“It’s believed that total construction starts for the U.S. should be able to register growth for 2017 as a whole, helped by this year’s strength for institutional building, notwithstanding the near term disruption to construction activity caused by Hurricane Harvey in the Houston TX area and Hurricane Irma in Florida,” said Robert A. Murray, chief economist for Dodge Data & Analytics.