Construction Starts Jump 20%
Date Posted: January 23, 2024
Posted In: News,
From Construction Dive: Total construction starts surged 20% in December to a seasonally adjusted annual rate of $1.12 trillion after three months of falling activity in September, October and November, according to Dodge Construction Network.
Despite the big bounceback during the last month of the year, total construction activity remained 4% lower compared to 2022, according to the report.
“Construction starts ended the year on a positive note,” said Richard Branch, chief economist for Dodge Construction Network. “The planning queue is stabilizing, and the promise of lower rates should spur construction onward. While hurdles remain, including scarce labor and tight credit, 2024 should be a more positive year for the construction sector.”
Dive Insight:
2024 provides promise that positive momentum will continue to build, largely due to the expectation of lower interest rates, said Branch.
The American Institute of Architects’ Architecture Billings Index, which tracks architectural design activity, also showed some positive signs, with fewer firms reporting a decline in billings. The ABI is a leading indicator of construction activity nine to 12 months out.
Among one of the favorites for heightened activity this year, manufacturing construction starts rebounded 75% in December.
The subsector, composed of electric vehicle battery factories and semiconductor fabrication plants, helped boost overall nonresidential building starts by 37% in December to a seasonally adjusted annual rate of $479 billion, according to the report.
Meanwhile, commercial starts, which include retail, office and warehouse projects, increased 48%, with all subcategories posting sizable growth, according to the report.
Institutional starts, which consist of healthcare and education projects, gained 22% in December, largely due to growth in education, public building and recreation construction. Only healthcare-related construction posted a decline in December, according to Dodge.