Mega projects led gains, but details show broad-based construction expansion
HAMILTON, NJ — August 16, 2022 — Total construction starts rose 48% in July to a seasonally adjusted annual rate of $1.36 trillion, according to Dodge Construction Network. This gain results from the start of three large manufacturing plants and two LNG export facilities. However, even without these projects, total construction starts would still have increased 7%. Nonresidential building starts rose 79% in July, and nonbuilding starts jumped 120%, conversely residential starts decreased 8%.
Year-to-date, total construction was 11% higher in the first seven months of 2022 compared to the same period of 2021. Nonresidential building starts rose 22% over the year, residential starts were 1% higher, and nonbuilding starts were up 16%.
For the 12 months ending July 2022, total construction starts were 10% above the 12 months ending July 2021. Nonresidential starts were 21% higher, residential starts gained 4%, and nonbuilding starts were up 10%.
“Mega-projects aside, construction continues to improve despite the pressure created by higher interest rates and labor scarcity,” said Richard Branch, chief economist for Dodge Construction Network. “Combined with the strong labor market, this is another indicator that the U.S. is not currently in a recession. However, the Federal Reserve will continue to aggressively raise interest rates until they feel that inflation is under control. This will create mounting pressure on building activity and potentially lead to a slowdown in construction starts by year-end.”
Below is the breakdown for construction starts:
For the 12 months ending July 2022, total nonbuilding starts were 10% higher than in the 12 months ending July 2021. Utility/gas plant starts were 44% higher, highway and bridge starts rose 7%, and environmental public works increased by 4%. Miscellaneous nonbuilding starts decreased 18%.
The largest nonbuilding projects to break ground in July were the $9.4 billion first phase of the Driftwood LNG export terminal in Calcasieu Parish, LA, the $7 billion third stage of the Cheniere Corpus Christi LNG in Gregory, TX, and the $2 billion Intermountain Power Project in Delta, UT.
For the 12 months ending July 2022, residential starts improved 4% from the same period ending July 2021. Single family starts were 4% lower, and multifamily starts were 26% stronger on a 12-month rolling sum basis.
The largest multifamily structures to break ground in July were the $680 million first phase of the OneJournal Square building in Jersey City, NY, the $380 million 90Ninety mixed-use building in Jamaica, NY, and the $325 million Domino Sugar Factory redevelopment in Brooklyn, NY.
Watch Chief Economist Richard Branch discuss July Constructions Starts here
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Cailey Henderson | 104 West Partners | email@example.com
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