Construction starts fell back 3% in February, as the early months of 2018 showed signs of reduced activity. Total construction starts for the first two months of 2018 came to $102.4 billion, down 7% from the same period a year ago. From January to February, nonresidential construction increased 5%, residential building rose 1%, and non-building construction declined 23%.
The weak showing in nonbuilding construction in February was caused in part by a drop of 83% in the electric utility/gas plant category, as well as by a 17% decline in the public works categories.
The growth in nonresidential building in February was fueled by a 14% increase in the commercial categories and a 5% rise in the institutional categories.
The slight increase in residential building in February was attributable to a 7% increase in multifamily housing construction. Single-family housing construction fell back 1% in February, declining for the second month in a row.
Compared with the same period last year, total new construction starts by region for the first two months of 2018 performed as follows: South Central, down 12%; Northeast, down 17%; Midwest, up 13%; West, down 17%; and South Atlantic, unchanged.
“It’s true that the construction industry is now seeing more headwinds,” said Robert A. Murray, chief economist for Dodge Data & Analytics. “At the same time, the economy is expected to get a near term lift from tax reform. On balance, the rate of growth for total construction is decelerating, but activity for 2018 is expected to stay at a relatively healthy amount.”