Total Construction Starts Jump 8% Following 2-Month Decline
Date Posted: November 22, 2022
Posted In: News,
From Construction Dive: Total construction starts jumped 8% in October to a seasonally adjusted rate of $1.12 trillion following two consecutive months of decline, according to a Dodge Construction Network report.
Nonresidential building and nonbuilding starts gained 9% and 26%, respectively, while residential starts fell by 3% for the month, according to the report. Year to date through October, total construction starts posted a 16% gain from 2021. Nonresidential building starts rose 37%, nonbuilding kickoffs jumped 17% and residential commencements remained flat, according to the report.
The rebound in starts signals the construction industry “continues to weather the storm of higher inflation rates,” said Richard Branch, chief economist for Dodge, in the report.
Dive Insight:
Following two consecutive declines in starts during August and September, Branch maintained last month that that the drop should “not be seen as a precursor to a cyclical pullback in the industry.”
Now, October’s rebound lends credence to that call, and signals the industry continues to fend off concerns of higher inflation rates, at least for now.
“While the residential sector is feeling the pain, the nonresidential building and infrastructure sectors are hitting their stride,” said Branch in the report. “Some weakness is to be expected as the Federal Reserve continues its battle with inflation. However, the damage should be isolated to a few verticals and not as widespread as what the industry witnessed during the Great Recession.”