Construction starts advanced 10% in May from the previous month, following a 15% decline in April and a 16% increase in March. Total construction starts for the first five months of 2019 amounted to $295.0 billion, down 9% from the same period a year ago. From April to May, nonresidential construction increased 7%, residential building advanced 2%, and nonbuilding construction jumped 32%.
The sharp rise in nonbuilding construction in May can be linked in large part to a 552% surge in the electric utility/gas plant category, reflecting the start of five power plant projects. However, the public works categories as a group slipped 1% in May.
The growth in nonresidential building in May was mainly driven by a 350% jump in the manufacturing plant category. Meanwhile, the commercial categories as a group declined 5% and educational facilities fell back 1%.
Residential building registered a small improvement in May after three straight months of decline.
Single-family housing increased 2% following a slowdown earlier in the year, while multifamily housing also advanced 2%.
Compared with the same period last year, total new construction starts by region for the first five months of 2019 performed as follows: South Central, down 1%; Northeast, down 5%; Midwest, down 8%; West, down 15%; and South Atlantic, down 12%.
“Amidst the volatility, the pace of construction starts has on balance been sluggish so far in 2019,” said Robert A. Murray, chief economist for Dodge Data & Analytics. “At the same time, there are still positive factors in the current environment affecting construction.”