Recent data released by Dodge Data & Analytics revealed that total construction starts fell 3% in July to a seasonally adjusted annual rate of $854.8 billion.
“Construction material prices continue their march higher and are weighing heavily on construction starts,” said Richard Branch, Chief Economist for Dodge Data & Analytics. “Lumber and copper prices have fallen in recent weeks; however, steel, plastic and other construction-related products are continuing their ascent. These increases will continue to impact construction starts over the coming months, somewhat muting the impact of stronger economic activity. A further risk to the sector is the rising number of COVID-19 cases due to the Delta variant. While we don’t expect significant business restrictions in response, it is a risk that can not be fully discounted. On the upside, projects entering the planning stage remain at levels not seen in several years and forward progress on an infrastructure program and the federal budget provides hope that brighter days are ahead.”
A Look at the Numbers
- Nonresidential building starts
- Fell 1% last month to a seasonally adjusted annual rate of $283.8 billion;
- Commercial starts dropped 19—warehouse, office, and retail sectors all pulled back, however, hotel starts rose;
- Institutional starts rose 11% due to a lift in healthcare, recreation and transportation;
- Year-over-year non-residential starts dropped 8% from July 2020.
- Residential Building Starts
- Fell 6% in July to a seasonally adjusted rate of $400 billion;
- Single-family starts fell 6% and multifamily starts fell 4%;
- A silver lining—Year-over-year residential starts were 23% higher last month than July 2020.
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