U.S. April Construction Starts Fall 15%

The value of new construction starts dipped by 15% in April to a seasonally adjusted rate of $685.2 billion. The dip comes after a 16% hike in March.

Two of the three major construction sectors reported steep declines. Electric utilities/gas plants and nonbuilding construction both fell 31% from its high in March.

Figures for gas plants were higher in March due to the start of the $4.3 billion Calcasieu Pass liquefied natural gas (LNG) export terminal.

Non-residential building dipped 18% in April after a boost in March due to the groundbreaking of the $1.6 billion Toyota-Mazda automotive manufacturing facility in Alabama. Other large projects drove figures higher and impacted other related industries.

April saw another blow to the construction industry, which many indicate a slowing in construction. Terex put up their boom trucks for sale, which were purchased by Load King. Boom trucks are commonly used in construction projects.

An airport terminal project at Kansas City International Airport was a bright spot for non-residential building in April.

Residential building dipped 1% in April. A modest rebound in multifamily housing offset a further decline in in single family housing.

In the first four months of the year, total construction starts came in at $224.5 billion on an unadjusted basis. That figure is down 8% from the same period last year.

In the twelve months ending April 2019, total construction starts were in line with the same period last year.

“Overall construction activity continues to show deceleration around an up-and-down monthly pattern, with a varied performance by major construction sector,” said Robert A. Murray, chief economist for Dodge Data & Analytics.

Start statistics can be volatile on a monthly basis, according to Murray. Much of the recent volatility can be attributed to the lack of large projects.

The public works sector of nonbuilding construction was off to a slow start in 2019, but was partly offset by a spike in electric utilities/gas plants.

Non-residential building has remained close to the pace of last year due to continued strength for hotels, office buildings, transportation terminals and educational facilities.

Residential building is still retreating. According to Murray, single family housing has yet to provide evidence that it can rebound from the slower pace that started taking hold at the end of 2018.

The miscellaneous public works category, which includes rail transit, site work and pipelines, dipped 29%. April did include the start of the $307 million rail transit extension at Hartsfield-Jackson International Airport in Atlanta, GA.

Water supply construction was also down in April, falling 17%, and river/harbor development dipped 40%. Sewer construction was a bright spot, climbing 88% due to a $631 million water pollution control effluent tunnel being built in Carson, CA and a $412 million sewer project in Redwood City, CA.

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