Construction starts dropped 3% in February from the previous month, returning to the downward trajectory observed in the closing months of 2018. Total construction starts for the first two months of 2019 came to $99.3 billion, down 12% from the same period a year ago. From January to February, nonresidential construction remained the same, residential building fell 3%, and non-building construction declined 8%.
The decrease in non-building construction in February was partly attributable to a 15% drop in the public works categories from the previous month, and a 7% decline in highway and bridge construction. However, the electric utility/gas plant category was up 34%.
While nonresidential building was flat in February, the commercial building categories managed to advance 2%. Meanwhile, the institutional categories were unchanged, and the manufacturing plant category declined 14%.
Residential building softened in February, with multifamily housing construction retreating 7% after rebounding in January; and single-family housing declining 2%, continuing the slightly negative trend that emerged during the fourth quarter of 2018.
Compared with the same period last year, total new construction starts by region for the first two months of 2019 performed as follows: South Central, down 10%; Northeast, down 15%; Midwest, down 24%; West, down 8%; and South Atlantic, down 9%.
“For residential building, single family housing remains sluggish, as affordability constraints continue to dampen demand even as mortgage rates have settled back, while a more cautious lending stance by banks may now be starting to restrain multifamily development,” said Robert A. Murray, chief economist for Dodge Data & Analytics.