Total construction starts rose 10 percent in September to a seasonally adjusted annual rate of $889.7 billion, according to Dodge Construction Network. Nonresidential building starts rose 15 percent.
“Construction starts have struggled over the last three months as concerns over rising prices, shortages of materials, and scarce labor led to declines in activity,” says Richard Branch, chief economist for Dodge Construction Network. “The increase in September, however, partially allays the fear that construction is headed for a free-fall and shows that owners and developers are still ready to move ahead with projects. Starts are likely to continue to trend in a positive but sawtooth fashion in the coming months until a more balanced recovery takes hold next year.”
Regionally, total construction starts improved in all five regions during September.
Nonresidential starts rebound
Nonresidential building starts rebounded in September, gaining 15 percent to a seasonally adjusted annual rate of $281.8 billion. Commercial buildings rose 13 percent as starts improved for the hotel, warehouse, and retail sectors. Office building starts fell. Institutional building starts rose 13 percent with all sectors but public buildings improving over the month. Manufacturing starts jumped 47 percent following a particularly weak August. In the first nine months of 2021, nonresidential building starts were 7 percent higher. Commercial starts increased 8 percent, manufacturing starts were 38 percent higher, while institutional starts were up just 2 percent.
For the 12 months ending in September 2021, nonresidential building starts were 1 percent lower than in the 12 months ending in September 2020. Commercial starts were down 1 percent, institutional starts rose 1 percent and manufacturing starts dropped 12 percent in the 12 months ending September 2021.
The largest nonresidential building projects to break ground in September were the $670 million modernization program at Pittsburgh International Airport in Pittsburgh, Pennsylvania, the $658 million Irvine Campus Medical Complex in Irvine, California, and the $495 million Phillips 66 Sweeny Hub Fractionator in Sweeny, Texas.
