Total construction drops sharply in November

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HAMILTON, New Jersey – (COMMERCIAL THREAD) – Total construction starts fell 14% in November to a seasonally adjusted annual rate of $ 867.8 billion, according to Dodge Construction Network. Housing starts for non-construction and non-residential buildings suffered the brunt of the decline, dropping 30% and 21% respectively after seeing strong increases in October as three major projects saw the light of day. Residential starts gained a modest 3%. Without the major projects in October, total housing starts in November would have increased 5%.

“Large projects aside, the underlying trend continues to point to a modest recovery in housing starts,” said Richard Branch, chief economist, Dodge Construction Network. “However, even as projects continue to move forward, the near-term outlook remains murky due to continued escalation in material prices and labor shortages. While construction is expected to be given some respite in 2022, these challenges will limit the industry’s ability to take full advantage of the large number of planning and financing projects resulting from the infrastructure package. The result will be moderate growth in housing starts in the near term. ”

Below is the breakdown of construction beginnings:

  • Non constructible construction departures fell 30% in November to a seasonally adjusted annual rate of $ 188.1 billion. The decline in activity follows a strong October, which included the inauguration of an $ 8.5 billion LNG export facility. With this project removed from the data, housing starts in November would have increased by 13%. The miscellaneous non-construction category in November jumped 70%, and highway and bridge starts rose 11%. However, public environmental starts fell 14%, and utility / gas plant starts fell 69%. Year-to-date total non-construction starts were 1% higher than the previous year through November. Environmental public works rose 19% and power / gas plant starts rose 15%. Highways and bridge starts fell 7%, and miscellaneous non-construction work fell 15% in the first 11 months of the year.

    The largest non-constructive projects will be launched in November were the $ 1.6 billion Vineyard Wind, an 1,800 MW offshore wind project in Barnstable, MA, the $ 337 million portion of the Foothill Gold Line light rail project in Glendora, CA, and the $ 325 million Sonoran Solar in Buckeye, AZ.

  • Start of non-residential construction lost 21% in November, falling to a seasonally adjusted annual rate of $ 281.1 billion. This decrease is explained by the start of two major manufacturing projects initiated the previous month. Without these two projects in the data, non-residential construction projects would have increased 5% in November. In November, commercial building starts fell 10%, with only parking lots and warehouses posting small gains. Manufacturing fell 96%. In contrast, institutional starts rose 28% across all categories. In the first 11 months of 2021, non-residential building starts rose 11%. Commercial starts rose 7%, manufacturing starts rose 86% and institutional starts rose 5%.

    Biggest non-residential construction projects to launch in November were the $ 2.6 billion first phase of the replacement of Terminal 1 at the San Diego International Airport in San Diego, Calif., the $ 840 million Robley Rex VA Medical Center campus in Louisville, KY, and the ‘$ 419 million expansion of the Wisconsin Convention Center in Milwaukee, WI.

  • Start of residential construction rose 3% in November to a seasonally adjusted annual rate of $ 398.6 billion. Multi-family housing starts rose 16%, while single-family housing starts fell 2%. In the first 11 months of 2021, residential starts are up 20% compared to the same period a year ago. Single-family housing starts rose 20% and multiple-family housing starts rose 23%.

    The largest multi-family structures inaugurate in November were the $ 300 million first phase of the High St. Atlanta mixed-use projects in Dunwoody, GA, the $ 237 million North Loop Green 3 project in Minneapolis, MN, and the $ 200 million residential building 60 Kilmarnock St. in Boston, MA.

  • At the regional level, Total housing starts improved in the Northeast and Midwest regions, but declined in the South Atlantic, South Central and West regions.

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