Pace of New Construction Retreats Slightly in March after February Spike, Dodge Data Shows
NEW YORK CITY — After a 13 percent jump in February, the pace of new construction starts in March across all real estate sectors fell by 1 percent, according to New York-based data firm Dodge Data & Analytics.
The data is based on groundbreakings nationwide and uses the estimated construction costs of each project.
Construction starts in March totaled a seasonally adjusted annual rate of $660.5 billion, down from $667.6 billion in February.
The lift in February was largely fueled by utilities and public works, according to Dodge. While that construction activity pulled back in March, other commercial real estate sectors filled the bulk of the gap.
If electric and gas plants are excluded, the total for March actually rose 4 percent versus February. The report also notes that March was well above the previous seven months, when new construction hit a temporary slump.
“While March construction activity was down slightly from February, it stayed above the lackluster performance witnessed during the second half of last year that continued through January,” says Robert Murray, chief economist for Dodge.
Big Lift in Certain Sectors
Some sectors even saw a massive spike in new construction starts. Transit buildings, for example, shot up 339 percent, buoyed by the start of two projects: $663 million for work on the rail terminus at Grand Central Station in New York City and $537 million for a new terminal at Louis Armstrong International Airport in New Orleans.
Educational facilities saw an increase of 20 percent in new starts, with the largest project being a $131 million research building at the University of Kentucky.
Construction starts in the hospitality sector rose 47 percent compared with 38 percent in recreation. Two large casino/hotel projects fueled those gains: The Montreign Resort and Casino in Kiamesha Lake, N.Y., started construction on a $630 million casino and a $332 million hotel, while MGM Resort and Casino in Springfield, Mass., broke ground on a $192 million casino and $78 million hotel.
Retail construction in March increased 19 percent, reflecting the $140 million renovation of the Fashion Outlets of Philadelphia mall in Philadelphia and the $116 million retail expansion at TD Garden in Boston, where the city’s NHL and NBA teams play.
Office, Warehouse Construction Slows
On the negative side, office construction retreated 27 percent in March after a 26 percent spike in February. Despite the decline, several large office projects were included as March starts, such as $293 million for work at the Toyota Corporate Campus project underway in Plano, Texas, and a $131 million office building in Atlanta.
Warehouse construction also retreated in March, slipping 13 percent. However, manufacturing showed improvement in March after a weak February, rising 20 percent thanks to projects such as a $335 million carbon fiber production plant in Moore, S.C., and the $220 million Phase I of a Volvo auto assembly plant in Ridgeville S.C.
Multifamily construction increased 15 percent, bouncing back following a 6 percent decline in February. There were 12 multifamily projects valued at $100 million or more that started in March. New York City, Miami, Boston, San Francisco and Los Angeles were the leading metros for new multifamily construction, according to Dodge.
— Jeff Shaw