Big Construction Projects Drive Market in February

At a seasonally adjusted annual rate of $667.6 billion, Dodge Data & Analytics says new construction starts in February advanced 10% compared to the previous month. Much of the lift in February came from the nonbuilding construction sector, as the Dodge electric power and gas plant category included a $3 billion segment of a liquefied natural gas (LNG) export terminal in Texas and six power plant projects valued each in excess of $200 million.

Nonbuilding construction. Nonbuilding construction in February surged 49% to $200.9 billion (annual rate). The electric power and gas plant category jumped 328%, boosted by the start of the $3 billion third segment of that LNG export terminal in Freeport, Texas, and the six very large power plant projects alluded to earlier — a $761 million gas-fired power plant in Connecticut, plus five large solar power projects in Texas, California and Arizona. In addition, February included the start of several large wind farm projects in Texas and West Virginia.

Hotels. Hotel construction in February climbed 48%, aided by the start of the $357 million hotel portion of the $530 million Gaylord Rockies Resort and Convention Center in Aurora Colo., and the $177 million hotel portion of the $306 million Omni City Center Convention Hotel in Louisville, Ky.

Offices. Office construction in February advanced 25%, with the push coming from five large projects — the $275 million Southport Waterfront Corporate Campus in Renton Wash.; a $266 million office building in Washington, D.C.; a $200 million Facebook data center in Prineville Ore.; a $178 million research and development campus in Irvine, Calif.;  and a $174 million office building in San Francisco.

During the first two months of 2016, the top five metropolitan areas ranked by the dollar amount of new office starts were the following — San Francisco, New York, Washington, Seattle and Boston.

Schools and universities. Educational facilities settled back 13% in February following 19% growth in the previous month. Despite the decline, February did include groundbreaking for several noteworthy educational facility projects, including a $134 million business school facility at Carnegie Mellon University in Pittsburgh and a $90 million high school in Alabaster Ala.

Residential. Residential building in February dropped 5% to $281.3 billion (annual rate), following the 5% gain reported in January. Even with the pullback, February included groundbreaking for eight multi-family projects valued at $100 million or greater, led by the $233 million Gran Paraiso Bay condominium building in Miami; a $165 million residential tower in Atlanta; and a $143 million condominium building in West New York, N.J. New York continues to lead the nation in multi-family construction, followed by Miami, Boston, Atlanta, and San Francisco.

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