Concrete Products is the leading source for Concrete Plants, Concrete Mixers, Precast, and Ready Mix news.

Sources: Dodge Data & Analytics, New York; CP staff

Total 2016 construction starts advanced 1 percent to $676.5 billion, a considerably smaller gain than the 11 percent increase reported for 2015, according to Dodge Data & Analytics. If the volatile manufacturing and electric utility/gas plant categories are excluded, last year’s total construction starts would be up 4 percent, depicting a more gradual deceleration relative to the corresponding 9 percent year-over-year increase in 2015.

The 1 percent increase at the national level for total 2016 construction starts was the result of a mixed performance at the five-region level. Total construction gains were reported in the West and the South Atlantic, each up 10 percent; and the Midwest, up 5 percent. Total construction declines were reported in the Northeast, down 2 percent, reflecting especially a multifamily housing segment retreat for the metro New York area; and the South Central, down 16 percent, due to a leveling off of 2015 activity tied to the start of several massive liquefied natural gas export terminals.

“The construction start statistics over the course of 2016 revealed a varied pattern,” says Dodge Data & Analytics Chief Economist Robert Murray. “Growth was reported during the first and third quarters, while activity settled back during the second and fourth quarters. Commercial building continued to rise, and institutional building provided evidence that it was beginning to regain upward momentum after pausing in 2015. Single-family housing showed moderate improvement, while multifamily housing witnessed growth in numerous markets with the notable exception of New York. On the negative side, public works settled back in 2016. In a broad sense, construction activity shifted to a more mature stage of expansion, characterized by a slower rate of growth for total construction compared to the 10 percent to 12 percent gains of the previous four years.”

“For 2017, more growth at a moderate pace is expected for total construction. Commercial building has yet to see much in the way of rising vacancy rates, and the institutional building sector will be helped by the passage of such recent bond measures as the $9 billion Proposition 51 in California,” Murray adds. “Manufacturing plant construction should turn upward, no longer exerting a downward pull on overall construction activity. Despite rising mortgage rates, housing should benefit from greater demand coming from an increasing number of millennials moving into their 30s. And, public works will be supported by recent bond measures passed at the state level, although Congress will need to revisit the flat federal funding for highways under the current continuing resolution that expires at the end of April. Additional support for public works will depend on how Congress responds to the proposals by the Trump Administration for more infrastructure spending.”