Total construction starts dropped 1% in May to a seasonally adjusted annual rate of $902.8 billion, according to Dodge Data & Analytics. The brunt of the decline was borne by residential starts, while nonresidential and nonbuilding starts continued their recovery from the COVID-19 pandemic.
“The weight of higher material prices and a lack of skilled labor are having a direct and notable influence on residential construction activity,” said Richard Branch, Chief Economist for Dodge Data & Analytics. “These negative factors are expected to continue to impact the sector over the remainder of the year and will result in a less positive influence from housing on overall levels of construction activity. While feeling similar effects, the nonresidential sector continues its modest recovery off the lows of last summer. There are enough projects in the planning pipeline to suggest this trend should continue into next year, but higher material prices will result in longer lead times to groundbreaking and more temperate improvements in nonresidential starts.”
Below is the full breakdown:
For the 12 months ending May 2021, total nonbuilding starts were 5% lower than the 12 months ending May 2020. Environmental public works starts were 18% higher, while utility and gas plant starts were down 23%. Highway and bridge starts were down less than one percentage point and miscellaneous nonbuilding starts were 14% lower through five months.
The largest nonbuilding projects to break ground in May were the $915 million Gateway South transmission project in Medicine Bow, Wyoming, the $795 million improvements to the West Davis Highway in Farmington, Utah, and a $528 million sewage reclamation project in Salt Lake City.
For the 12 months ending May 2021, nonresidential building starts were 19% lower than the 12 months ending May 2020. Commercial starts were down 20%, while institutional starts fell 14%. Manufacturing starts dropped 43% in the 12 months ending May 2021.
The largest nonresidential building projects to break ground in May were the $1.5 billion Diamond Green Diesel refinery in Port Arthur, Texas,, the $920 million Michigan Medicine Clinical Inpatient Tower in Ann Arbor, Michigan,, and the $475 million University of California Living and Learning dorm project in San Diego.
For the 12 months ending May 2021, total residential starts were 18% higher than the 12 months ending May 2020. Single family starts gained 27%, while multifamily starts were down 2% on a 12-month sum basis.
The largest multifamily structures to break ground in May were a $500 million mixed-use project in Brooklyn, New York, the $230 million Mather Senior Living Community in McLean, Virginia, and the $160 million Alcove Tower in Nashville, Tennessee.
Regionally, May’s starts rose in the Midwest, South Atlantic, and West regions but fell in the Northeast and South Central regions.