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Monthly Nonresidential Starts Plummet08-25-15 | News

Monthly Nonresidential Starts Plummet
Across-The-Board Drop of 28 Percent

All five major sectors monitored by Construction Market Data Group saw their nonresidential building output drop sharply in July, compared to June. The year-to-year falloff was a little less severe.

Total nonresidential construction starts in July plummeted nearly 28 percent on a month-to-month basis to $22.4 billion, a report from Construction Market Data Group shows.

The year-to-year result was a little better, as the drop-off was close to 12 percent. All five major nonresidential sectors monitored by CMD Group dropped a combined 27.7 percent, compared to June, most of them by considerable margins.

Commercial skidded 34 percent; miscellaneous nonresidential dropped 28 percent; heavy engineering declined 27.2 percent; and institutional decreased 24.6 percent, all compared to their respective numbers in June. Industrial starts pulled back about 10 percent.

Retail, an important subgroup of the commercial sector, dropped 72.3 percent from June to July. Miscellaneous government offices, a subcategory of institutional, declined 77.7 percent, also compared to June. Private office starts, a subgroup of commercial, declined 58.3 percent. Religious facilities, a unit of institutional, dropped nearly 61 percent. Miscellaneous commercial was up nearly 75 percent.

In a year-to-year comparison, total nonresidential starts in July were down 11.9 percent, and most of the major sectors declined. Heavy engineering skidded 25.5 percent; commercial declined 3.3 percent; institutional pulled back 10.6 percent; and miscellaneous nonresidential starts decreased 1.7 percent. Industrial-manufacturing was the only sector that improved, skyrocketing 525 percent in one year.

Retail declined 50.6 percent year-to-year, while private offices dropped nearly 50 percent. Warehouses, another subgroup of commercial, jumped 258 percent on an annual basis. Police, courthouse and prison facilities, a subcategory of institutional, increased 277.5 percent.

Private offices dropped nearly 50 percent in one year; religious facilities declined nearly 33 percent; military facilities, a unit of institutional, shed near 66 percent; and miscellaneous government was down nearly 30 percent. On the upside, warehouse starts jumped nearly 260 percent year-to-year, while miscellaneous commercial improved 55 percent. CMD also keeps track of year-to-date totals, or the time frame of January-to-July. In this regard, total starts are down just 1.3 percent, compared to the same seven-month period in 2014.

Year-to-date, commercial is down only 3 percent; industrial starts increased 74.3 percent; institutional dropped 9 percent; miscellaneous nonresidential declined 2 percent; and heavy engineering was unchanged.

There was an increase of 6,000 jobs in the construction industry on a month-to-month basis, and a gain of 231,000 jobs, compared to July 2014. Year-to-date, construction jobs went up by 108,000 positions.

Year-to-year employment in architectural and engineering services in July went up a solid 3.6 percent, CMD said. "If the current trend continues, total employment in this sector will catch up with its pre-recession peak this fall," the consulting firm added.

Total private-sector average hourly earnings are up 2.1 percent year-to-year, while weekly earnings have increased 2.4 percent. For all construction workers, hourly earnings have risen faster, up 2.6 percent, but weekly earnings are slower, plus 1.8 percent. Website link: https://tinyurl.com/nzmt7a4