Nonresidential construction starts data are finally showing signs of recovering from the unusually bad weather that seemed to stall construction activity during the first part of the year.
Norcross, Ga. (PRWEB) June 16, 2014
Reed Construction Data announced today the value of May construction starts, excluding residential contracts, increased 5.9% to $23.9 billion after falling 4.7% in April. Starts were up 10.8% from May 2013.
Year-to-date starts, which totaled $106.1 billion, were 2.6% higher than the same period in 2013. Since the starts data are not seasonally adjusted (NSA), caution should be used in analyzing monthly movements. Year-over-year comparisons are often used, as they remove much of the seasonal effects.
“Nonresidential construction starts data are finally showing signs of recovering from the unusually bad weather that stalled construction activity during the first part of the year,” stated Bernard Markstein, U.S. Chief Economist, Reed Construction Data. “Most sectors are showing improvement over April’s weak starts, as well as year to date.”
Commercial starts managed a small gain in May, up 4.3%, after being pummeled in April, down 32.2%. Year-to-date commercial starts were down 15.8% from the same period last year.
Private office starts edged up 2.6% in May after tumbling 13.9% in April. Year-to-date starts were 17.2% higher than a year ago. Meanwhile, government office starts fell 10.9% in May, but were still up 10.9% on a year-to-date basis over last year.
Retail starts were up 9.2% in May after minor slippage in April (-0.1%); nonetheless, year-to-date starts were down 15.4% from 2013.
Warehouse starts are doing well, advancing 16.5% in May and up a healthy 27.7% on a year-to-date basis.
Industrial (manufacturing) building starts rebounded strongly from a weak April. May starts rocketed up 124.3% following a 75.1% plunge in March. As a result, year-to-date starts were only 4.3% lower than in 2013.
Institutional building starts weakened a bit in May, down 2.7%, but were up 9.5% on a year-to-date basis. Starts for schools and colleges, the largest category within the group, were 11.2% higher on a year-to-date basis. Hospital and clinic starts, the second largest category within the group, were 6.0% higher on a year-to-date basis.
Heavy engineering (non-building) starts showed continued strength, increasing for the third month in a row. May starts jumped 14.8% and year-to-date starts were up 13.7%.
Road and highway starts, after surging 50.8% in April, gave back a modest 0.8% in May and was the only category in the group posting a monthly decline. On a year-to-date basis, starts were up 10.8%.
Water and sewage starts, the second largest category in the group, were 12.5% higher on a year-to-date basis. The only category within the group down on a year-to-date basis was dam and marine starts (-21.6%).
As of May, year-to-date nonresidential starts for a number of categories were in positive territory. Heavy engineering starts were the group showing the greatest strength. Institutional starts were also on an upward, though less steep, trajectory.
Commercial and industrial starts were struggling, down on a year-to-date basis; however, there were several categories within the commercial group with good gains.
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“This month’s nonresidential construction starts are an indication construction activity is on the road to recovery from the extreme weather we experienced at the start of the season,” stated Markstein. “Reed is forecasting future starts numbers to reflect this improvement, as well as a growing economy.”
The value of construction starts each month is summarized from the Reed database of all active construction projects in the U.S., excluding residential construction. Missing project values are estimated with RSMeans building cost models.
A start is determined by taking the announced bid date and adding 30 days. It is then assumed the project will actually break ground within 30-60 days of the start date. Reed continues to follow the project via our network of researchers, so if the project is abandoned or rebid, the start data are subsequently updated to reflect the new information.
About Reed Construction Data
Reed Construction Data is a trusted source for detailed, accurate, and up-to-date information on private and public construction projects across the United States and Canada. Reed’s data collection teams leverage strong industry relationships, innovative technology, and third-party data sources to deliver timely and accurate information on projects, companies, and contacts and daily updates for all types of general and civil construction. For more information, visit http://www.reedconstructiondata.com.