Megaprojects led gains, but details show large-scale construction expansion
HAMILTON, New Jersey — August 17, 2022 — Total housing starts rose 48% in July to a seasonally adjusted annual rate of $1.36 trillion, according to Dodge Construction Network. This gain results from the start-up of three large manufacturing plants and two LNG export facilities. However, even without these projects, the total number of housing starts would still have increased by 7%. Non-residential building starts rose 79% in July, and non-construction starts jumped 120%, conversely, residential starts fell 8%.
Year-to-date, total construction is up 11% in the first seven months of 2022 compared to the same period of 2021. Non-residential building starts are up 22% in the year. he year, residential housing starts increased by 1% and non-construction housing starts increased by 16%.
For the 12 months ending in July 2022, the total number of housing starts was 10% higher than for the 12 months ending in July 2021. Non-residential housing starts increased by 21%, residential starts rose 4% and non-construction starts rose 10%.
“Mega-projects aside, construction continues to improve despite pressure from rising interest rates and labor shortages,” said Richard Branch, chief economist for Dodge Construction Network. . “Combined with the strength of the labor market, this is another indicator that the United States is not currently in a recession. However, the Federal Reserve will continue to aggressively raise interest rates until it feels inflation is under control. This will create increasing pressure on construction activity and could lead to a slowdown in housing starts by the end of the year.
Below is the breakdown of construction starts:
- Building not buildable departures rose 120% in July to a seasonally adjusted annual rate of $433.5 billion. The main driver of growth during the month was the utilities/gas sector, with the start of construction of two multi-billion dollar LNG export plants. Without these two projects, housing starts excluding construction would still have increased by 29% in July due to gains in miscellaneous housing starts excluding construction (+85%), environmental public works (+60%) and construction starts for highways and bridges (+33%) . In the first seven months of the year, total non-construction housing starts increased by 16% compared to 2021. Utilities/gas plant starts increased by 63 % over seven months, highway and bridge starts increased by 16% and environmental public works increased by 2%. Miscellaneous non-construction starts, on the other hand, fell 20% over seven months.
For the 12 months ending July 2022, total non-construction housing starts were 10% higher than the 12 months ending July 2021. increased by 44%, construction of highways and bridges increased by 7% and environmental public works increased by 4% . Miscellaneous housing starts, excluding construction, fell by 18%.
The largest non-build projects will be launched in July were the $9.4 billion first phase of the Driftwood LNG export terminal in Calcasieu Parish, LA, the $7 billion third phase of the Cheniere Corpus Christi LNG in Gregory, TX, and the intermountain power project of $2 billion in Delta, UT.
- Start of non-residential buildings rose 79% in July to a seasonally adjusted annual rate of $530.5 billion. Manufacturing was the main driver of growth with the start of four projects totaling $17.9 billion. Without these projects, non-residential housing starts would still have increased by 16%. Institutional housing starts rose 28% in the month due to a strong gain in healthcare housing starts, while commercial housing starts lost 11%. In the first seven months of 2022, non-residential building starts increased by 22% compared to the first seven months of 2021. Commercial housing starts increased by 13% and institutional housing starts increased by 2%, while manufacturing housing starts have increased by 185% since the start of the year. base.
For the 12 months ending in July 2022, non-residential building starts increased by 21% compared to the 12 months ending in July 2021. Commercial housing starts increased by 13%, institutional starts increased 6% and manufacturing starts increased 170% on a rolling 12-month basis. .
The largest non-residential construction projects will be launched in July were the $10 billion Intel Semiconductor factory in Jersey Township, OH, the $2.9 billion BlueOval SK Battery Park Ford factory in Glendale, KY, and the $2.8 billion BlueOval City manufacturing campus. dollars in Stanton, TN.
- Residential construction begins fell 8% in July to a seasonally adjusted annual rate of $391.9 billion. Single-family housing starts fell 9% and multi-family housing starts fell 5%. In the first seven months of 2022, residential starts were 1% higher than the same period in 2021. Multi-family starts rose 24%, while single-family dwellings fell 7%.
For the 12 months ending July 2022, residential starts improved 4% from the same period ending July 2021. Single-family starts were 4% lower and multi-family starts were down. 26% stronger on a 12-month rolling sum basis.
Largest Multi-Family Structures to Rise in July were the $680 million first phase of the OneJournal Square building in Jersey City, NY, the $380 million 90Ninety mixed-use building in Jamaica, NY, and the $325 million Domino Sugar Factory redevelopment in Brooklyn , NY.
- At the regional level, total housing starts in July increased in all regions except the West.
Watch Chief Economist Richard Branch discuss the start of July constructions here