New construction starts in October advanced 13 percent to a seasonally adjusted annual rate of $591.1 billion, according to Dodge Data & Analytics.
Much of October’s gain for total construction was due to a sharp rebound by nonresidential building, with additional support coming from a moderate upturn for housing as the result of further strengthening by multifamily housing.
During the first 10 months of 2015, total construction starts on an unadjusted basis were $551.9 billion, up 10 percent from the same period a year ago. October’s data raised the Dodge Index to 125, compared to 111 in September.
“The healthy increase for construction starts in October alleviates concern about a stalling expansion that may have arisen with the sluggish activity in August and September,” stated Robert Murray, chief economist for Dodge Data & Analytics.
Nonresidential building in October jumped 32 percent to $200.7 billion after a weak September.
The commercial building categories as a group soared 49 percent in October. Store construction surged 56 percent, pushed upward by the $561 million expansion and renovation of the Westfield Century City Mall in Los Angeles.
Office construction advanced 45 percent, helped by the start of two large data center projects — the $570 million Facebook data center in Fort Worth, Texas and the $300 million expansion to the Google data center in Lithia Springs, Ga.
Hotel construction grew 28 percent, aided by the start of the $350 million McCormick Place Marriott Marquis Hotel in Chicago.
Warehouse construction improved 24 percent, supported by the start of the $130 million Dollar Tree distribution center in Cowpens, S.C.
The garage and service station category contributed to October’s commercial upturn, climbing 119 percent due to the start of two large consolidated rental car facilities located at Chicago’s O’Hare International Airport and San Antonio’s International Airport.
The institutional side of the nonresidential building market climbed 23 percent in October. The educational facilities category increased 21 percent, led by the start of the $285 million Rockefeller University River Campus in New York. Healthcare facilities in October rose 18 percent. Transportation terminal work was the one institutional category to report an October decline, sliding 5 percent.
The manufacturing building category also lost momentum in October, retreating 15 percent.
Residential building grew 9 percent in October. Multifamily housing bounced back 42 percent. While September had just two multifamily projects valued at $100 million or more that reached groundbreaking, October had 11 such projects.
The 10 percent increase for total construction starts on an unadjusted basis during the first ten months of 2015 was the result of double-digit gains for residential building and nonbuilding construction, while nonresidential building was down moderately.
Residential building advanced 15 percent year-to-date, with multifamily housing up 19 percent. Non-building construction year-to-date climbed 29 percent, with electric utilities and gas plants up 201 percent while public works was flat. The commercial building group year-to-date was steady with its 2014 amount.