New construction starts in December advanced 4 percent to a seasonally adjusted annual rate of $591.6 billion, according to Dodge Data & Analytics. The December gain follows a 5 percent decline in November and brings total construction activity back close to the amount that was reported in October.
December showed moderate increases for each of the three main construction sectors – nonresidential building, residential building, and nonbuilding construction (public works and electric utilities).
Highway and bridge construction dipped 7 percent.
Nonresidential building in December grew 3 percent to $178.5 billion (annual rate). The commercial building group provided most of the December lift to nonresidential building, rising 9 percent from the previous month.
Office construction increased 6 percent, and included the December start of a $210 million office tower in Oklahoma City, a $100 million office building in East Hartford, Conn., and a $44 million corporate headquarters for Subaru in Camden, N.J. Store construction advanced 17 percent in December, reflecting the start of three outlet centers located in Clarksburg, Md. ($41 million), Baltimore ($35 million), and the Houston area ($35 million).
The garage and service station category in December jumped 50 percent, boosted by the start of a $331 million consolidated car rental facility in Kahului, Hawaii. Warehouse construction in December was unchanged from its November amount, while hotel construction fell 17 percent. The manufacturing plant category in December dropped 16 percent, maintaining the weak performance that emerged during the second half of 2015, although December did include the start of several automotive-related projects such as a $75 million automobile assembly plant in the St. Louis area.
The institutional side of the nonresidential building market held steady in December. Amusement-related work soared 87 percent, lifted by three noteworthy projects – the $478 million renovation and expansion of the Miami Beach Convention Center in Miami Beach, Fla., the $130 million renovation of the Nassau Coliseum in Uniondale, N.Y., and the $100 million expansion of the Kennedy Center for the Performing Arts in Washington, D.C.
Transportation terminal work climbed 48 percent in December, and gains were also reported for religious buildings, up 13 percent; and healthcare facilities, up 11 percent. The healthcare facilities category in December was boosted by three large projects, located in Minneapolis ($147 million), Davenport, Iowa ($139 million), and Longmont, Colo. ($108 million).
However, educational facilities (the largest nonresidential building category by dollar volume) retreated 19 percent in December following its improved pace during the previous two months. Cushioning the December decline for educational facilities was groundbreaking for a $100 million biomedical research center at Northwestern University in Chicago. The public buildings category also weakened in December, sliding 11 percent.
Residential building in December increased 6 percent to $278.1 billion (annual rate). Multifamily housing finished the year on a strong note, rebounding 22 percent after slipping 5 percent in November. December featured groundbreaking for 10 multifamily projects valued at $100 million or more, led by two projects in New York valued at $575 million and $229 million respectively, a $169 million mixed-use tower in Jersey City, N.J., and a $167 million residential tower in Miami.
Single-family housing in December was unchanged from its pace in November, essentially staying with the flat pattern that emerged during the second half of 2015.
Nonbuilding construction in December rose 3 percent to $135.0 billion (annual rate). The gain was due to a 108 percent rebound for the electric utility and gas plant category after a weak November, although the level of activity remained well below what was reported during the first half of 2015.
December projects that contributed to the electric utility and gas plant increase were a $1.0 billion gas-fired power plant in Pennsylvania, a $380 million gas-fired power plant in South Carolina and a $300 million wind farm in North Dakota. The public works categories as a group slipped back 8 percent in December following the 18 percent jump reported in November.
Weaker activity was registered by highway and bridge construction, down 7 percent; and miscellaneous public works, down 29 percent.
The miscellaneous public works category in December did include the start of the $915 million Saddlehorn petroleum pipeline in the states of Oklahoma, Kansas and Colorado, but activity for the category was still down relative to a strong November that included the start of the $1.6 billion Westside Subway Extension project in Los Angeles. Each of the environmental public works categories in December posted increases – river/harbor development, up 26 percent; water supply construction, up 19 percent; and sewer construction, up 9 percent.