Construction starts surged 15% in May, as construction activity reached its highest level in eight months. Total construction starts for the first five months of 2018 amounted to $299.9 billion, down 3% from the same period a year ago. From April to May, nonresidential construction rose 18%, residential building remained unchanged, and non-building construction jumped 39%.
Contributing to the strong performance in non-building construction in May was a 47% gain in the public works category, and a 25% increase in water supply construction.
The advances in nonresidential building in May were driven in part by a 138% leap in the amusement
and recreational building categories.
The flat performance in residential building in May was due to a 4% decline in single-family housing construction, combined with a 13% rebound in multifamily housing construction after a weak April.
Compared with the same period last year, total new construction starts by region for the first five months of 2018 performed as follows: South Central, down 1%; Northeast, down 12%; Midwest, down 8%; West, down 4%; and South Atlantic, up 4%.
“On balance, the pace of total construction starts is staying close to the levels achieved over the past year, when activity grew 5%,” said Robert A. Murray, chief economist for Dodge Data & Analytics. While noting that the construction industry faces challenges such as higher materials prices and the recent increase in interest rates, Murray added that “to this point they have not yet produced a discernible negative impact on the overall level of construction starts.