Driven mainly by gains in the public works and electric utilities categories, construction starts in May increased 5% from the previous month. Total construction starts for the first five months of 2016 came to $256.7 billion, down 12% from the same period a year ago. From April to May, nonresidential construction declined 6%, residential building rose 1%, and non-building construction grew 24%.
The large increases in non-building construction in May were mainly due to the starts of major public works projects, including the start of the $3.8 billion Dakota Access Pipeline.
The decrease in nonresidential building was caused mainly by a 9% decline in commercial building. However, the institutional side of the nonresidential building market held steady in May.
The slight improvement in residential building in May was mainly attributable to a 15% rise in multi-family housing construction. Single family housing, by contrast, fell 4% from April, despite continued low interest rates.
Compared with the same period last year, total new construction starts by region for the first five months of 2016 performed as follows: South Central, down 36%; Northeast, down 8%; Midwest, up 7%; West, down 2%; and South Atlantic, no change.
Robert A. Murray, chief economist for Dodge Data & Analytics, observed that while the month-to month pattern for 2016 has been uneven, "the environment for construction still carries a number of positives-long-term interest rates remain low, commercial development is being financed from multiple sources, construction bond measures are being passed at the state level, and the new multiyear Federal transportation bill is in place."