New construction starts in December slipped 5 percent to a seasonally adjusted annual rate of $613.0 billion, according to Dodge Data & Analytics. The latest month’s decline for total construction was due to sharply reduced activity for the nonbuilding construction sector, reflecting further erosion by public works as well as a steep plunge by the electric utility/gas plant category. At the same time, nonresidential building in December held steady with its November pace, and residential building was able to register moderate growth.
Nonresidential building in December was reported at $224.0 billion (annual rate), basically unchanged from November. The manufacturing plant category jumped 124 percent, bouncing back from a weak November with the lift coming from the start of a $1.2 billion pharmaceutical plant in Clayton, N.C.
The commercial categories as a group advanced 11 percent in December, making a partial rebound after falling 20 percent in the previous month. Hotel construction climbed 74 percent, reflecting the start of the $164 million hotel portion of the $500 million Skyplex Entertainment Complex in Orlando and the start of a $138 million hotel at New York’s JFK International Airport (as part of the conversion of the historic TWA Flight Center building).
Office construction in December increased 25 percent, boosted by the start of two large data centers in Aurora, Ill. ($255 million) and Ashburn, Va. ($160 million), as well as by the start of a $117 million renovation project at Rockefeller Center in New York. Smaller gains in December were reported for commercial garages, up 13 percent; and stores, up 8 percent. Warehouse construction was the one commercial project type to retreat in December, falling 35 percent.
The institutional building categories as a group dropped 17 percent in December. Amusement-related construction plunged 70 percent, following its elevated activity in November that included the start of the $3.0 billion football stadium for the Los Angeles Rams in Inglewood, Calif. Despite the steep decline, the amusement category did include two noteworthy projects as December starts – the $242 million amusement park portion of the Skyplex Entertainment Complex in Orlando and a $130 million student recreation/aquatics center at San Jose State University in San Jose, Calif.
Reduced activity was also reported in December for public buildings (courthouses and detention facilities), down 17 percent; and healthcare facilities, down 12 percent. On the plus side, the educational facilities category jumped 34 percent in December, reaching its highest amount in 2016. Large projects that supported the increase for educational facilities were the $150 million renovation of a marine research center in Los Angeles, a $117 million research building for the University of California at Riverside, and an $84 million renovation of an elementary school in the Bronx, N.Y.
Transportation terminal work grew 20 percent in December, aided by the start of a $120 million expansion to Concourse A North at the Charlotte Douglas International Airport in Charlotte, N.C. The religious building category bounced back 87 percent in December from an extremely weak November amount.
Residential building in December climbed 9 percent to $306.9 billion (annual rate). Multifamily housing finished the year on a strong note, rising 26 percent after retreating 12 percent in November.
December featured groundbreaking for 14 multifamily projects valued each at $100 million or more, led by the $275 million Ancora Apartment Tower in Chicago, a $260 million condominium tower in Minneapolis and a $250 million condominium tower in Sunny Isles Beach, Fla. Single-family housing in December increased 4 percent, maintaining the modest if at times hesitant upward trend that was present during 2016.
Nonbuilding construction in December plummeted 41 percent to $82.0 billion (annual rate), with especially steep declines by two project types susceptible to month-to-month volatility – electric utilities/gas plants and miscellaneous public works. The electric utility/gas plant category plunged 89 percent in December, following a 58 percent hike in November that reflected the start of the $2.1 billion Elba Island Liquefaction Project in Savannah, Ga., which will enhance natural gas liquefaction and exporting capabilities at that location.
Miscellaneous public works, which includes site work, pipelines and mass transit, fell 47 percent from November, which received support from the start of the $155 million Yerba Buena Island Redevelopment site work project in San Francisco. Weaker activity in December was also reported for sewer construction, down 8 percent; highways and bridges, down 10 percent; and river/harbor development, down 74 percent. Water supply construction was the one nonbuilding project type able to report a December gain, surging 53 percent with the push coming from the start of large water treatment facilities in North Dakota ($130 million) and California ($110 million).