Starts In The Highway And Bridge Category Were Up 8%, While Environmental Public Works Were 8% Lower.
Total construction starts (dollars) climbed 12% from September to October at a seasonally adjusted annual rate, Dodge Data & Analytics reported. “While sizeable, the increase does not erase September’s substantial pullback in starts,” stated Ken Simonson, Associated General Contractors of America (AGC) chief economist. “All three major categories moved higher over the month: nonbuilding starts rose 25%, nonresidential buildings increased 19%, while residential activity gained 2%.
At press time Dodge Data and Analytics reported that total construction starts fell 2% in November to a seasonally adjusted annual rate of $797.5 billion following the strong gain in October.
“Through the first 10 months of 2020, total construction starts were 11% lower than the same period of 2019. Nonbuilding starts were down 14%. Starts in the highway and bridge category were up 8%, while environmental public works were 8% lower,” he stated.
“The miscellaneous nonbuilding and utility/gas plant categories were each down 34% year-to-date. Nonresidential building starts were down 24% through the first 10 months of 2020. Commercial starts were 27% lower and institutional starts were 16% lower, while manufacturing starts tumbled 54%. Residential construction starts were 2% higher. Single-family starts were up 8%, but multifamily starts were down 11%.”
Construction Materials
Selective materials shortages and price increases continue to affect contractors. AGC has received reports of cement shortages in California and Utah, and copies of price increase notices, effective in early January, from three fire sprinkler suppliers.
Participants in the October ABI survey also reported problems. “Overall, six in 10 responding firms this month indicated that they have seen some degree of higher prices/more limited availability of construction materials over the past six to 12 months, with 32% reporting significantly higher prices/limited availability, and 28% reporting modestly higher prices/limited availability,” Simonson said. “At firms that reported that they have seen higher prices/more limited availability for construction materials in the past six to 12 months, 91% indicated that price/availability issues are at least a somewhat serious problem at their firm, with 15% reporting it as a very serious problem.”
Housing Starts
Housing starts (units) increased 4.9% at a seasonally adjusted annual rate from September to October and 14% year-over-year (y/y), reported the U.S. Census Bureau. Multifamily (five or more units) starts slumped 3.2% for the month and 20% y/y. Single-family starts jumped 6.4% and 29%, respectively. Residential permits were unchanged from September and up 2.8% y/y, with single-family permits up 0.6% and 21%, respectively, and multifamily permits down 5.9% and 31%. Nevertheless, Wells Fargo Economics commented, “There is still an immense undersupply of all types of housing, particularly affordable rental housing. We expect apartment demand to ramp back up once the pandemic is comfortably behind us.”
Construction Employment
Seasonally adjusted construction employment in October trailed pre-pandemic February levels in 37 states and exceeded them in 13 states and the District of Columbia, according to AGC’s analysis of Bureau of Labor Statistics (BLS) data. New York lost the most construction jobs between February and October (-41,600, -10%), followed by Texas (41,500, -5.2%) and California (-17,600, -3.1%).
Vermont had the largest percentage loss (-22%, -3,200 jobs), followed by North Dakota (-13%, -3,900). Virginia added the most construction jobs over that span (7,100, 3.5%), followed by Kentucky (4,300, 5.4%) and Alabama (4,300, 4.5%). South Dakota posted the largest percentage gain (9.4%, 2,300 jobs), followed by Kentucky and Alabama. Construction employment decreased from September to October in 12 states, increased in 36 states and Washington, D.C. and was unchanged in South Dakota and Utah. Maryland had the largest job loss for the month (-2,600 jobs, -1.5%), followed by Georgia (-1,800, -0.9%).
Maryland also had the largest percentage decrease, followed by Delaware (-1.4%, -300). California added the most construction jobs over the month (26,300, 3.1%), followed by Texas (9,400, 1.3%) and Louisiana (6,700, 5.3%). Alaska had the largest percentage gain for the month (10%, 1,500 jobs), followed by Iowa (7.0%, 4,700) and Alabama (6.0%, 5,600). (BLS reports combined totals for mining, logging and construction in Washington, D.C., Delaware and Hawaii.)