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Construction Starts Move Lower in January

Total construction starts slipped 6 percent from December to January to a seasonally adjusted annual rate of $759.2 billion, according to Dodge Data & Analytics. All three major categories moved lower in January. Nonresidential building lost 6 percent.

With only one, limited month of data available for 2020, it is difficult to ascribe a 2020 trend, say analysts. Some perspective can be gleaned, however, by examining a 12-month moving total. For the 12 months ending January 2020, total construction starts were 1 percent higher than during the previous 12-month period.

In January, the Dodge Index moved downward to 161 (2000=100) compared to the 171 posted in December 2019 and was 8 percent lower than its most recent 12-month average.

“Coming in slightly weaker than the previous month, January’s starts did little to change our view that construction starts will remain near their recent highs in 2020 even though they are likely to fall as the economy slows,” says Richard Branch, chief economist of Dodge Data and Analytics.

On a 12-month total basis, total nonresidential building starts were less than one percentage point lower than they were in the 12 months ending in January 2019. Commercial starts were 5 percent higher, while institutional starts fell 3 percent and manufacturing starts were down 10 percent.

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