June Construction Starts Climb 9 Percent

New construction starts in June advanced 9 percent from the previous month to a seasonally adjusted annual rate of $832.7 billion, according to Dodge Data & Analytics. The increase followed the 10 percent gain reported for May, as total construction starts continued to strengthen following April’s subdued performance. By major sector, much of the lift in June came from a 16 percent jump for nonresidential building.

June’s data raised the Dodge Index to 176 (2000=100), compared to an upwardly revised 161 for May. June’s reading was the highest so far for the Dodge Index during 2019, topping the 175 for March, and coming in slightly above the full year 2018 average for the Dodge Index at 172. On a quarterly basis, the Dodge Index edged up 1 percent during the second quarter of 2019, helped by the improved activity in May and June after a weak April. This followed a 7 percent decline during this year’s first quarter compared to the final three months of 2018. “On balance, the pace of construction starts has been sluggish so far in 2019, as activity has been generally lower than the healthy amount reported during the first half of 2018,” says Robert A. Murray, chief economist for Dodge Data & Analytics. “The improved activity during May and June suggests that the gap relative to last year should narrow in coming months.”

Nonresidential building in June was $308.3 billion, annual rate, up 16 percent ,which followed an 8 percent increase in May. The commercial side of nonresidential building increased 12 percent. The office building category advanced 31 percent. Other commercial building categories experienced decreased activity in June – stores deceased 1 percent and hotels went down 11 percent.