Landscape Architect Articles

Nonresidential Starts Plunge10-28-15 | News

Nonresidential Starts Plunge
Sharp Drop in September

There were $25 billion worth of nonresidential construction starts in September, a decrease of 18 percent from August, a consulting firm said in a revised and updated news release. CMD had reported earlier that the decline was 26.1 percent.

Nonresidential construction starts took a nosedive in September, according to statistics compiled by Construction Market Data Group. CMD had reported earlier that starts totaled $15 billion, excluding the residential sector, representing a decline of 26.1 percent, compared to August.

"There hasn't been a worse September figure in the past decade," CMD said. "The sharp drop in total starts has been mainly due to a dramatic contraction in one major category, heavy engineering. Roads-highway work, in particular, has gone into hibernation."

Based on CMD's preliminary information, the firm said it was the worst month-to-month performance since February 2012 when $13.9 billion worth of starts was recorded.

Since then, CMD has revised its September figures, which are a little better. September's level of U.S. construction starts, excluding residential work, was $25 billion, a drop of 18 percent versus August.

The revised number still compares poorly with the long-term September-to-August percentage change of minus 3 percent.

Starts are down 2.7 percent on a year-to-year basis. In CMD's earlier report, the firm said there was a 42 percent drop in September's starts, compared to the same month in 2014.

Year-to-date starts in 2015, though, are holding up fairly well. When compared with the same January-to-September period of 2014, starts have gone up 5.6 percent. In CMD's first news release, it said starts had declined 5.8 percent, and not increased, year-to-date.

CMD breaks down nonresidential data into five categories, with several subcategories underneath each of those. The major sectors are commercial, industrial, institutional, miscellaneous nonresidential and heavy engineering.

In August-to-September data:
The biggest loss was in commercial, down 20 percent. Heavy engineering lost 18.2 percent. Miscellaneous nonresidential declined nearly 18 percent. Institutional dropped 16.8 percent. Industrial was the only sector to post a gain, and it was up 35.3 percent.

Within the commercial group, parking garages shed 80 percent; hotels-motels dropped 62.2 percent; and private offices were down almost 60 percent. But retail improved by nearly 70 percent, and laboratories gained a whopping 566.6 percent.

Under the institutional group, miscellaneous government dropped almost 53 percent; hospitals-clinics shed 35.4 percent; and religious centers were off 24.3 percent. Police, courthouse and prison construction increased 26.6 percent; and nursing-assisted living facilities gained 30.9 percent. Under heavy engineering, roads-highways shed 33.2 percent, and water-sewage was down 36.2 percent. Dams-marine projects increased 14 percent, and miscellaneous civil engineering gained 50 percent.

In a comparison of year-to-year numbers:
Industrial was up 410 percent, and heavy engineering gained 19.4 percent, but all other major sectors lost ground. Commercial was down nearly 25 percent, and institutional lost 12.3 percent. Miscellaneous nonresidential slipped 16.3 percent.

Under the commercial group, amusement was down 74 percent; private offices declined 69 percent; and miscellaneous commercial dropped 51.5 percent. Laboratories increased 430.4 percent, and retail gained 40.9 percent.

Within institutional, hospitals-clinics shed 53.2 percent, and miscellaneous government dropped 38.5 percent. Religious facilities were down nearly 40 percent. Police, courthouse and prisons were up 51.8 percent, and nursing-assisted living centers increased 22.7 percent.

In the heavy engineering category, airports increased 14.5 percent; dams-marine facilities declined 1.3 percent; miscellaneous civil projects were up 118.3 percent. Roads-highways were down 1.8 percent, while water-sewage improved 8.1 percent.

In year-to-date (January-to-September) stats:
Heavy engineering lost 14.7 percent; miscellaneous nonresidential dropped 0.4 percent; institutional declined 4 percent; and commercial shed 0.7 percent. Industrial was the only sector with a gain, up 50 percent.

Within commercial, retail increased 7.3 percent; parking garages climbed 73.7 percent; but private offices shed 27.3 percent. Warehouses gained 23 percent, and miscellaneous commercial advanced 17.8 percent.

Under institutional, military facilities lost 59 percent, while police, courthouse and prison construction improved 68.3 percent. Miscellaneous government climbed 18.7 percent, while hospitals-clinics were down 17.4 percent. Libraries-museums dropped 24.1 percent. In the heavy engineering group, airports declined 2.2 percent; and miscellaneous civil projects increased 18.9 percent. Dams-marine facilities gained 27.1 percent. Roads-highways increased 13.4 percent, and water-sewage projects were up 15.8 percent.

Website link: https://tinyurl.com/pozhug7