At a seasonally adjusted annual rate of $711.6 billion, new construction starts in August slipped 2 percent from July, according to Dodge Data & Analytics. The decline followed July’s 6 percent increase, yet still kept total construction activity 5 percent above the relatively subdued pace reported during the second quarter. The nonbuilding construction sector in August dropped 24 percent after soaring 26 percent in July, reflecting decreased activity for public works and power plants, even with the August start of a $1.3 billion natural gas-fired power plant in California. Residential building in August eased back 1 percent, due to weaker activity for multifamily housing.

Nonresidential building was the growth sector in August, climbing 14 percent with the start of two massive projects in New York NY – the $1.6 billion Moynihan Station project and the $1.2 billion Javits Convention Center expansion. For the first eight months of 2017, total construction starts on an unadjusted basis were $481.7 billion, down 1 percent from the same period a year ago. The year-to-date performance for total construction was restrained by a 39 percent drop for the electric utility/gas plant category. If the electric utility/gas plant category is excluded, total construction starts in this year’s first eight months would be up 2 percent from the same period in 2016. The August data produced a reading of 151 for the Dodge Index (2000=100), compared to the 154 reported in July. The Dodge Index began 2017 on a healthy note, averaging 160 in the first quarter, but then fell 11 percent to 143 in the second quarter. The readings for the Dodge Index in July and August suggest that total construction starts are on track for a partial rebound in the third quarter, although September will reflect some negative impact from Hurricanes Harvey and Irma. “What stands out about the August statistics is the strength shown by the institutional side of nonresidential building, which is consistent with a broader trend that’s taken hold during 2017,” stated Robert A. Murray, chief economist for Dodge Data & Analytics. “The institutional building segment (which includes such project types as transportation terminals, convention centers, and educational facilities), is providing much of the lift this year to nonresidential building, while the commercial building segment has decelerated after a 20 percent surge in 2016. It’s believed that total construction starts for the U.S. should be able to register growth for 2017 as a whole, helped by this year’s strength for institutional building, notwithstanding the near term disruption to construction activity caused by Hurricane Harvey in the Houston TX area and Hurricane Irma in Florida.”

Nonresidential building in August was $268.3 billion (annual rate), a 14 percent gain that followed a 5 percent decline in July. The institutional building categories as a group soared 27 percent, led by a 174 percent hike by the transportation terminal category. Most of the upward push came from the $1.25 billion rail terminal segment of the $1.6 billion Moynihan Station project in New York NY, which also includes $300 million for office space and $50 million for retail space. This project involves the redevelopment of the James A. Farley Post Office Building into a new train hall with additional office and retail space, expanding the existing Penn Station in Manhattan. Other transportation terminal projects in August included the $229 million Federal Inspection Services facility at San Diego International Airport and $90 million for airport security infrastructure at San Francisco International Airport. The amusement and recreational category also climbed sharply in August, advancing 144 percent with the lift coming from the $1.2 billion expansion to the Jacob K. Javits Convention Center in New York NY. In addition, the educational facilities category increased 39 percent in August, following lackluster activity during the previous three months. Large educational facilities projects that reached groundbreaking in August included a $200 million biology research building at Yale University in New Haven CT and the $153 million Medicine and Heart Health Institute building at the University of South Florida in Tampa FL. There were five K-12 school buildings valued at $50 million or more entered as August starts, located in Brooklyn NY ($93 million and $74 million), Columbia City IN ($65 million), the Bronx NY ($51 million), and Dallas TX ($50 million).

On the negative side, healthcare facilities dropped 41 percent in August after jumping 117 percent in July which featured the start of the $1.5 billion Penn Medicine Patient Pavilion in Philadelphia PA. August declines were also reported for public buildings (courthouses and detention facilities), down 12 percent; and religious buildings, down 22 percent. The commercial categories as a group increased 11 percent in August, bouncing back after a 20 percent decline in July. The office building category registered a 38 percent gain in August, aided by the start of these large projects – a $523 million office campus in Redwood City CA, the $322 million Moffett Towers II office park in Sunnyvale CA, the $300 million office portion of the Moynihan Station project in New York NY, and the $145 million NCR headquarters second office building in Atlanta GA. Hotel construction in August was also up sharply, rising 78 percent after a weak July with the help of these projects – the $342 million hotel portion of the $500 million Resorts World Hotel and Casino (phase 1) in Las Vegas NV, the $224 million Oregon Convention Center Hotel in Portland OR, the $200 million Seminole Hard Rock Tampa hotel tower in Tampa FL, and the $141 million hotel portion of the $226 million Sycuan Hotel and Casino expansion (phase 1) in El Cajon CA.

Commercial garage construction improved 6 percent in August, but declines were reported for warehouses, down 12 percent; and stores, down 37 percent. Even with its August decline, the warehouse category included groundbreaking for a $110 million Dollar Tree distribution center in Warrensburg MO and a $92 million Amazon fulfillment center in Salt Lake City UT. The manufacturing plant category in August plunged 41 percent after a relatively strong July, with the largest August project being a $225 million healthcare diagnostics production facility expansion in East Walpole MA. Residential building, at $293.4 billion (annual rate), settled back 1 percent in August. Multifamily housing retreated 12 percent following its 34 percent July increase, resuming the moderate downward trend that’s taken hold in 2017 after elevated activity during 2016. There were 6 multifamily projects valued at $100 million or more that reached groundbreaking in August, compared to 9 such projects in July. The large multifamily projects in August were led by five projects in the New York NY metropolitan area, with two in Brooklyn ($261 million and $175 million), two in Manhattan ($225 million and $150 million), and one in Sayreville NJ ($137 million).

In August, the top five metropolitan areas ranked by the dollar volume of multifamily starts were the following – New York NY, Boston MA, Atlanta GA, San Francisco CA, and Dallas-Ft. Worth TX. Through the first eight months of 2017, New York NY was still the leading market in terms of the dollar amount of multifamily starts, despite retreating 14 percent from the same period of 2016. Rounding out the top five multifamily markets during the first eight months of 2017, with their percent change from a year ago, were the following – Los Angeles CA, down 8 percent; Chicago IL, down 26 percent; San Francisco CA, up 7 percent; and Atlanta GA, up 45 percent. Single family housing in August rose 4 percent, showing modest improvement after losing some momentum during the previous four months. By major region, single family housing performed as follows in August – the West, up 9 percent; the Midwest, up 6 percent; the South Atlantic, up 3 percent; the South Central, up 2 percent; and the Northeast, unchanged from July. Nonbuilding construction in August was $149.8 billion (annual rate), down 24 percent. The previous month had jumped 26 percent, reflecting a 64 percent surge by the electric utility/gas plant category which included the July start of two massive gas-fired power plants, located in California ($2.2 billion) and New York ($1.6 billion). The public works segment of nonbuilding construction, up 11 percent in July, had been lifted by the start of such projects as the $1.5 billion Brownsville to Nueces natural gas pipeline in Texas and the $844 million Vista Ridge water supply pipeline project in San Antonio TX.

In August, the electric utility/gas plant category fell 58 percent, returning to a level similar to what was reported during the first six months of 2017. While August included the start of the $1.3 billion AES Alamitos Energy Modernization of a natural gas-fired power plant in Long Beach CA, the next largest power plant project was the $350 million Santa Rita Wind Farm in Big Lake TX. The public works categories as a group dropped 5 percent in August, with weaker activity for river/harbor development, down 35 percent; miscellaneous public works (including pipelines), down 39 percent; and water supply construction, down 56 percent. Running counter was a 78 percent increase for sewer construction, which included a $178 million bio solids treatment facility in Dallas TX and a $177 million waste water treatment plant in Queens NY as August starts. Also showing growth in August was highway and bridge construction, which advanced 23 percent as the result of such large projects as a $475 million bridge replacement in Birmingham AL and a $460 million high-occupancy toll lanes project in Alexandria VA.

Through the first eight months of 2017, the top five states in terms of the dollar amount of highway and bridge construction starts were – Texas, California, Florida, Pennsylvania, and New York. Virginia ranked number 10 in the first eight months of 2017, while Alabama ranked number 12. The 1 percent decline for total construction starts on an unadjusted basis during the first eight months of 2017 was the result of decreased activity for nonbuilding construction, as both nonresidential building and residential building posted gains. Nonbuilding construction fell 12 percent year-to-date, with electric utilities/gas plants down 39 percent and public works down 2 percent. Nonresidential building year-to-date climbed 5 percent, with its institutional building segment up 14 percent while commercial building slipped 2 percent and manufacturing building dropped 4 percent. Residential building year-to-date was up 1 percent, as an 8 percent increase for single family housing slightly outweighed a 15 percent slide for multifamily housing. By major region, total construction starts during the January-August period of 2017 revealed this behavior compared to a year ago – the Northeast, up 9 percent; the South Atlantic, up 5 percent; the West, up 3 percent; the South Central, down 8 percent; and the Midwest, down 14 percent.