Construction starts fell 11% in October from September, marking the third consecutive monthly decline in construction activity. Total construction starts for the first 10 months of 2019 came to $671.4 billion, down 4% from the same period in 2018. From September to October, nonresidential construction decreased 20%, residential building fell 2%, and non-building construction dropped 14%. The steep decline in non-building construction in October can be linked to decreases in starts in a number of categories, including electric utility/ gas plant (-69%) and environmental public works (-12%). However, advances were reported in starts for highway and bridge projects (4%) and miscellaneous non-building (9%).
The even larger drop in nonresidential building in October came after a much stronger September. Starts in commercial construction fell back 3%, while manufacturing starts decreased 69% and institutional starts declined 20%. Residential building moved downward in October, with single-family housing construction falling 7%.
This decrease was, however, accompanied by a 14% rise in multifamily housing starts. Compared to the same period of 2018, residential construction starts were down 6% through the first 10 months of 2019, with single family starts declining 3% and multifamily starts slipping 12%.
“Concern over the health of the U.S. economy continues to play a key role in the pullback in starts over the past few months,” stated Richard Branch, chief economist for Dodge Data & Analytics. “However, solid real estate fundamentals (such as vacancy rates) in addition to stable public funding will continue to support a modest level of construction activity across both public and private projects.”