Total construction starts fell 8% in February to a seasonally adjusted annual rate of $1.07 trillion, according to Dodge Construction Network. Nonresidential building starts dropped 16%, while nonbuilding starts lost 3%, and residential starts fell by 2%.
For the 12 months ending February 2024, total construction starts were up 2% from the 12 months ending February 2023. Nonresidential building starts were down 2% while residential starts were 4% lower, and nonbuilding starts up 19% on a 12 month rolling sum basis.
Nonresidential
Nonresidential building starts fell 16% in February to a seasonally adjusted annual rate of $407 billion. Institutional starts were down 19% during the month due to a large decline in transportation and education buildings. Commercial starts lost 3% due to a sizeable pullback in warehouse starts, while manufacturing starts were off 28%.
For the 12 months ending February 2024, nonresidential building starts were 2% lower than the previous 12 months. Manufacturing starts were down 13% and commercial starts were down 8%, while institutional starts were 9% higher for the 12 months ending February 2024.
Residential
Residential building starts lost 2% in February, falling to a seasonally adjusted annual rate of $392 billion. Single family starts improved 5% while multifamily starts lost 12%.
For the 12 months ending February 2024, residential starts were 4% lower than the previous 12 months. Single family starts were 2% lower, while multifamily starts were 6% lower on a 12 month rolling sum basis.
Dodge's response to the data
“Construction activity was hit hard by higher rates and more restrictive credit standards”, says Richard Branch, chief economist, Dodge Construction Network. “Starts struggled over the past several months as the lagged effect of higher rates impacted projects moving forward through the planning process. Additionally, the significant deficit of skilled labor led to further delays, especially in the manufacturing sector. While optimism should prevail in the second half of the year as the Federal Reserve begins to cut rates, some sectors like commercial, will make little headway over the remainder of the year.”
