$12B LNG project props up construction starts in July | Dump Trucks Charlotte NC

Columbus Ohio Dump Truck Company Brief:

• Total construction starts jumped 17% in July to a seasonally adjusted annual rate of $1.2 trillion, according to Dodge Construction Network, driven primarily by the $12 billion Rio Grande LNG facility in Brownsville, Texas. 
• Without that massive start, total nonbuilding starts, which increased 38% in July, would have actually dropped 7%, according to Dodge. Still, the jump in July, a rebound from June’s 9% drop, means the “up one month and down the next” trend for project kickoffs lingers, suggesting choppy conditions for the rest of the year.
• “Construction starts have plateaued and are making little headway,” said Richard Branch, chief economist for Dodge Construction Network. “The lag in nonresidential building projects entering the planning stage will slow starts as the year progresses, which should be offset by rising infrastructure activity.”

Dump Trucks Columbus OH Insight:

A trio of construction industry concerns — higher interest rates, increased material prices and labor shortages — continue to slow momentum across the board, said Branch.

The firm’s starts report tracks three broad categories: Nonresidential buildings; nonbuilding construction activity, such as highways and bridges; and residential buildings. 

Nonresidential building

Nonresidential building starts, which consist of commercial, institutional and manufacturing projects, fell 6% in July to a seasonally adjusted annual rate of $334 billion. 

Commercial starts, which include office, retail, hotel, warehouse and parking garages, increased 11% due to gains in warehouse and parking starts, offsetting a decline in office and hotel starts. 

Starts in manufacturing and institutional, which consists of education and healthcare projects, also dropped by 11% and 39%, respectively, in July, according to the report.

Despite the poor activity registered this month, total nonresidential building starts remain up 16% for the 12 months ending in July. During that same span, starts in institutional and commercial increased 20% and 8%, respectively, while manufacturing projects jumped 24%.

The largest nonresidential building projects to break ground in July included:

• The $405 million Envision AESC BMW manufacturing plant in Florence, South Carolina.
• The $370 million Wisteria at Warner Center office building in Los Angeles, California.
• The $277 million first phase of an airside concourse at Orlando International Airport in Florida.

$12B facility props up nonbuilding starts

The $12 billion Rio Grande LNG facility in Brownsville, Texas, bolstered nonbuilding starts in July, pushing starts up 38% for the month. 

But other categories within nonbuilding construction held off on new starts in July, according to the report. 

For example, highway and bridge construction lost 4% in July, while miscellaneous nonbuilding starts dropped 71% following the start of the Buffalo Bills’ new stadium in June.

Nevertheless, for the 12 months ending in July, total nonbuilding starts remained 21% higher than a year ago. During that period, utility and gas plant projects jumped 9%, while highway and bridge construction jumped 22%, according to the report.

The largest nonbuilding projects to break ground in July included:

• The $12 billion first phase of the Rio Grande LNG facility in Brownsville, Texas.
• The $2.8 billion concrete dock at the Pearl Harbor Naval Shipyard in Hawaii.
• The $813 million first phase of the Bellefield Solar farm and battery facility in California City, California.

Residential construction activity ticks up

Starts in residential construction posted a 20% uptick in July to a seasonally adjusted annual rate of $414 billion. Single-family starts increased 2%, while multifamily starts skyrocketed 62% higher in July, according to the report.

But new construction in the sector for the 12 months ending in July remained down 17%. On a year-to-date basis through July, total residential starts dipped 21%, according to the report.

The largest multifamily structures to break ground in July included:

• The $1 billion Clarkson Square condo and apartment building in New York City.
• The $365 million Queensbridge Collective residential tower in Charlotte, North Carolina.
• The $358 million Oasis Hallandale tower in Hallandale Beach, Florida.