Manufacturing starts plunge 34 percent, institutional down 19 percent

by Christopher Brinckerhoff | August 14, 2024 6:00 am

[1]

Total construction starts lost 19 percent in June, falling to a seasonally adjusted annual rate of $1 trillion, according to Dodge Construction Network[2]. Much of the decline was due to a stark decline in utility/gas starts following a strong May that saw several mega-projects get underway. During the month, nonbuilding starts fell 46 percent (following a 49 percent gain in May), while nonresidential starts fell 13 percent. Residential starts rose 9 percent during the month. On a year-to-date basis through June, total construction starts were up 7 percent from the first six months of 2023. Residential starts were up 14 percent, while nonbuilding starts gained 8 percent, and nonresidential building starts rose 1 percent.

For the 12 months ending June 2024, total construction starts were up 1 percent from the 12 months ending June 2023. Nonresidential building starts were down 7 percent, residential starts were up 7 percent, and nonbuilding starts were up 8 percent on a 12-month rolling sum basis.

Richard Branch, chief economist at Dodge Construction Network, says, “The construction market remains sluggish as high interest rates continue to reverberate through the sector. However, the Dodge Momentum Index, which tracks nonresidential building projects entering the planning phase, has been reasonably steady over the last year indicating that owners and developers remain cautiously optimistic that the conditions will be more conducive to construction in the future. But moribund starts activity means that these projects are piling up like water behind a dam. Lower rates in 2024 will allow these projects to start flowing again, resulting in a quicker pace of activity towards year-end.”

Nonresidential building starts lost 13 percent in June to a seasonally adjusted annual rate of $359 billion. Manufacturing starts tumbled 34 percent, while institutional starts retreated 19 percent. On the plus side, commercial starts rose 4 percent in June due to an increase in office and data center activity along with increased retail starts. On a year-to-date basis through June, total nonresidential starts were up 1 percent. Institutional starts were 11 percent higher, while commercial starts were down 3 percent, and manufacturing starts were 19 percent lower on a year-to-date basis through June.

For the 12 months ending June 2024, nonresidential building starts were 7 percent lower than the previous 12 months. Manufacturing starts were down 33 percent and commercial starts were down 9 percent, while institutional starts were 8 percent higher for the 12 months ending June 2024.

Source URL: https://www.metalarchitecture.com/news/industry-news/manufacturing-starts/

---