Total construction starts in the final month of 2019 dropped 21 percent from the previous month to a seasonally adjusted annual rate of $800.4 billion, according to Dodge Data & Analytics. The sharp decline was largely a response to hefty gains posted in November’s utility and manufacturing sectors. When removing the influence of these two very volatile sectors, total construction starts only fell 3 percent in December. By major sector, nonresidential building starts fell 20 percent in December.
The pullback in December pushed the Dodge Index down to 169 (2000=100) compared to the 213 posted in November, and just below the 12-month average of 174.
For the full year, total construction starts were essentially flat when compared to 2018 at $817.6 billion.
“Last year (2019) will go down as one of the most volatile years for monthly construction starts due the lumpy nature of large projects,” says Richard Branch, chief economist of Dodge Data & Analytics. “Looking beyond the influence of these massive projects, it is evident that the uncertainty surrounding trade policy weighed on construction activity last year.”
Nonresidential building dropped 20 percent from November to December to a seasonally adjusted annual rate of $289.5 billion. Commercial starts rose 5 percent in December due to solid gains in warehouses and parking structures.
