Construction starts declined 9% in August from the previous month, as construction activity continued to retreat following strong growth in the spring. Total construction starts for the first eight months of 2018 came to $540 billion, up 1% from the same period a year ago. From July to August, nonresidential construction fell 19%, residential building declined 7%, and nonbuilding construction advanced 6%.
The positive performance in nonbuilding construction in August was boosted by a 44% improvement in the electric utility/gas plant category, and a 74% jump in the miscellaneous public works category.
The sharp drop in nonresidential building in August was caused in part by a 17% decline in office construction, a 39% decrease in hotel construction, and a 63% fall in the transportation terminal category. However, the health care facilities category gained 27%.
Residential building fell back in August as single-family housing construction slipped 7% following an extended plateau, while multi-family housing construction dropped 8%.
Compared with the same period last year, total new construction starts by region for the first eight months of 2018 performed as follows: South Central, up 10%; Northeast, down 6%; Midwest, up 2%; West, down 5%; and South Atlantic, up 6%.
“For residential building, multi-family housing appears to be easing back in a broad sense from the strength shown earlier in 2018, and a similar pattern could be emerging for single-family housing,” said Robert A. Murray, chief economist for Dodge Data & Analytics. “Even so, on a year-to-date basis, residential building continues to register growth.”