New construction starts in December climbed 12% to a seasonally adjusted annual rate of $733.3 billion, bouncing back following November’s 12% decline, according to Dodge Data & Analytics. December’s gain for total construction reflected varied improvement by each of the three main construction sectors.
Nonbuilding construction (public works and electric utilities/gas plants) jumped 43%, lifted by the start of the $2.3 billion I-66 Corridor Improvements Project in northern Virginia. Nonresidential building rose 10%, aided by the start of two large data center projects, while residential building edged up 1%. For all of 2017, total construction starts grew 3% to $745.9 billion, which followed the 6% increase reported for 2016. The full year 2017 gain was dampened by a 35% downturn for the electric utility/gas plant category. If electric utilities and gas plants are excluded, total construction starts for 2017 would be 5% higher than the corresponding amount for 2016.
The December statistics produced a reading of 155 for the Dodge Index (2000=100), up from November’s 138. For the full year 2017, the Dodge Index averaged 158.
The 3% increase for total construction starts at the national level in 2017 was the result of mixed behavior by geography. The Northeast climbed 17%, aided by strong gains for its institutional building sector and natural gas pipelines, while more moderate total construction growth was reported for the South Atlantic, up 6%; and the West, up 3%. Total construction declines in 2017 were reported for the South Central, down 3%; and the Midwest, down 8%.
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