May Starts Creep Up 1%

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May Starts Creep Up 1%

New construction starts in May increased 1% to a seasonally adjusted annual rate of $651.2 billion, according to Dodge Data & Analytics. Public works construction bounced back 30% from its subdued April amount, helped by the May start of four large pipeline projects totaling a combined $3.0 billion. This enabled the non-building construction sector (which also includes electric utilities and gas plants) to register a 23% gain in May, offsetting modest 4% declines for both nonresidential building and housing. Through the first five months of 2017, total construction starts on an unadjusted basis were $274.3 billion, down 5% from the same period a year ago. If the volatile manufacturing plant and electric utility/gas plant categories are excluded, total construction starts during the first five months of 2017 would be up 2% relative to last year. The commercial categories as a group fell 10%, with office construction dropping 40% following gains of 41% in March and 23% in April. The two largest office projects entered as May starts were the $300 million American Airlines Trinity Campus in Fort Worth TX and the $166 million General Electric Global Headquarters Building in Boston MA. The other commercial categories showed growth in May. Warehouse construction climbed 17%, lifted by the start of a $160 million Amazon fulfillment center in the Houston TX area and an $84 million Fed Ex distribution center in the Worcester MA area. Store construction advanced 16% with the help of a $200 million shopping center shell in Norwalk CT. Hotel construction increased 11%, reflecting the start of a $118 million Hilton hotel in Myrtle Beach SC and a $116 million hotel in Monticello NY. Also contributing was the commercial garage category, which rose 7% in May. Manufacturing plant construction jumped 22% in May, lifted by the start of a $975 million chemical plant expansion in Louisiana, a $385 million polyethylene plant in Texas, and a $120 million research lab upgrade in Colorado.