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Construction Off to a Good Start in January

Feb. 16, 2022
Nonresidential building starts increased+ 4% and residential starts fell -1%.

Total construction starts increased +4% in January to a seasonally adjusted annual rate of $923.4 billion, according to Dodge Construction Network. Nonresidential building starts increased 4%, and nonbuilding starts rose +18%. Residential starts fell -1%.

Compared to one year ago, total construction was +8% higher in January 2022 than in January 2021. Nonresidential building starts were up +14%, nonbuilding starts rose +12% and residential starts gained +2%. For the 12 months ending January 2022, total construction starts were +13% above the 12 months ending January 2021. Nonresidential starts were +14% higher, residential starts gained +19%, and nonbuilding starts were up +3%.

“Construction starts continue to climb, mostly unimpeded by rising materials prices and shortages of labor and key materials,” said Richard Branch, chief economist for Dodge Construction Network in the press release. “The number of projects in the planning pipeline suggests that the rising trend in construction should continue for the time being and will be spread across more sectors than last year. While the outlook is positive, the many challenges facing the sector will limit upside potential.”

Nonresidential building starts rose +4% in January to a seasonally adjusted annual rate of $293.7 billion. The commercial sector moved +8% higher due to an increase in retail, office and warehouse starts. Institutional building starts gained +10% on gains in healthcare, transportation and recreation starts. Manufacturing starts fell -42%. For the 12 months ending January 2022 nonresidential building starts were +14% higher than in the 12 months ending January 2021. Commercial starts were up +11%, institutional starts rose +8%, and manufacturing starts gained +82% on a 12-month rolling sum basis. The largest nonresidential building projects to break ground in Januarywere the $1.5-billion JFK Terminal 4 expansion in Queens, NY; the $647-million Rutgers Cancer Institute in New Brunswick, NJ; and the $550-million JM Smucker Uncrustables manufacturing facility in McCalla, AL.

Residential building starts fell -1% in January to a seasonally adjusted annual rate of $430.9 billion. Single-family starts moved +2% higher, but multi-family starts fell -10%. For the 12 months ending January 2022, residential starts improved +19% from the 12 months ending January 2021. Single-family starts were -2% lower, while multi-family starts were +26% stronger on a 12-month rolling sum basis. The largest multi-family structures to break ground in January were the $370-million Seattle House mixed-use building in Seattle; the $300-million Broad & Washington mixed-use building in Philadelphia; and the $275-million Gateway II development in White Plains, NY.

Nonbuilding construction starts rose +18% in January to a seasonally adjusted annual rate of $198.9 billion. Highway and bridge starts rose +33%, and utility/gas plant starts more than doubled. However, environmental public works starts lost- 9%, and miscellaneous nonbuilding starts fell -5%. For the 12 months ending January 2022, total nonbuilding starts were +3% higher than the 12 months ending January 2021. Environmental public works starts were up +22%, and utility/gas plant starts rose +4%. Highway and bridge starts were -1% lower on a 12-month rolling sum basis, and miscellaneous nonbuilding starts were -16% lower. The largest nonbuilding projects to break ground in January were the $1.6 billion- Amtrak Gateway Portal Bridge Enhancement project in Secaucus, NJ; the $477-million US 183 North mobility corridor in Austin, TX; and a $46- million LA1 paving project in Golden Meadow, CA.

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