Construction starts drop 7%, marking second consecutive loss | Dump Trucks Charlotte NC

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Columbus Ohio Dump Truck Company Brief:

• Total construction starts tumbled another 7% in October to a seasonally adjusted annual rate of $1.1 trillion, according to Dodge Construction Network, due to a widespread slowdown in gas and utility projects. 
• The drop pushes overall year-to-date construction starts through October to trail last year’s pace by 4%, according to the report. The decline also follows September’s 6% contraction, marking two consecutive months of losses.
• “Construction starts have weakened over the last two months as high interest rates and tight credit have restrained activity,” said Richard Branch, chief economist for Dodge Construction Network. “While it seems likely that the Federal Reserve will hold off raising rates further, it will take time until they consider easing. This will likely result in a continued softening in construction starts over the next several months.”

Dump Trucks Columbus OH Insight:

While the construction starts report measures projects that have broken ground, the American Institute of Architects’ Architecture Billings Index tracks building design columbus oh dump truck company for jobs to come. That index, which leads actual construction by nine to 12 months, continued to soften in October as well. 

That means not only are billings declining at firms, but that fewer clients are committing to new projects, according to the report. Additionally, billings were universally soft across the entire country in October, with firms located in the West and Northeast continuing to report the weakest conditions overall for the second month in a row.

3 megaprojects boost nonresidential starts

One bright spot was nonresidential starts. The category includes commercial, institutional and manufacturing projects and ticked up 8% in October to a seasonally adjusted annual rate of $490 billion, predominantly due to manufacturing activity.

Without these megaprojects, starts in the category would have lost 28%, according to Dodge. Commercial starts, which include retail, office and warehouse projects, dropped 18% in October due to a very sharp pullback in office activity. Meanwhile, institutional starts, which include healthcare and education projects, also fell 15%. 

On a year-to-date basis through October, total nonresidential starts remained 7% lower than 2022, according to the report.

The largest nonresidential projects to break ground in October included:

• The $7.5 billion Micron semiconductor fabrication facility in Boise, Idaho.
• The $2.2 billion Hyundai and LG EV battery plant in Ellabell, Georgia.
• The $1.5 billion Nucor Sheet Mill in Apple Grove, West Virginia.

Nonbuilding starts post staggering drop

A decline in utility and gas plant starts pushed nonbuilding construction starts to fall 32% in October, a 12-month low.

However, despite the massive pullback, highway and bridge starts managed to improve 6% in October, according to the report.

Year-to-date through October, nonbuilding starts continue to show resilience. The sector remains up 20% overall during that span, according to the report. 

The largest nonbuilding projects to break ground in October included:

• The $319 million Newton-Weston bridge replacement in Newton, Massachusetts.
• The $300 million Cadence Solar Center in York Township, Ohio.
• The $280 million Estonian Solar project in Cooper, Texas.

Residential starts inch lower again

After two consecutive months of drops, residential building starts fell again in October by 1% to a seasonally adjusted annual rate of $385 billion, according to Dodge.

Single-family starts lost 2%, while multifamily starts remained flat. On a year-to-date basis through October, total residential starts fell 15%. Meanwhile, single-family and multifamily starts dropped 17% and 12%, respectively. 

The largest multifamily structures to break ground in October included:

• The $364 million QPX mixed-use tower in Long Island City, New York.
• The $350 million mixed-use building on West 37th Street in New York City.
• The $225 million first phase of the Baccarat Residences in Miami.