November Starts Slide 12%

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November Starts Slide 12%

New construction starts in November fell 12% to a seasonally adjusted annual rate of $650.5 billion, according to Dodge Data & Analytics. November’s data lowered the Dodge Index to 138 (2000=100), down from 157 for October and this year’s high of 173 for September, which reflected the boost coming from several unusually large projects – a $6.0 billion ethane cracker plant in Pennsylvania, the $4.0 billion Delta Airlines new terminal facility at LaGuardia Airport in New York NY, and the $1.7 billion 50 Hudson Yards office tower in New York NY. “While total construction starts fell considerably during October and November, the declines came after an exceptionally strong September,” stated Robert A. Murray, chief economist for Dodge Data & Analytics. “If one takes the average of September, October, and November, total construction starts during that period would be down only 1% from the average of the previous eight months. On balance, the construction expansion has continued during 2017, although it’s true that the rate of growth has slowed from the 6% gain reported for 2016 as well as the 11% to 13% yearly gains reported from 2012 through 2015.” The institutional building segment in November descended 13%, with an especially steep 59% plunge for the amusement category, which in October had received support from the start of the $1.1 billion retractable roof ballpark for the Texas Rangers in Arlington TX and a $240 million convention center expansion in Lexington KY. By contrast, the largest amusement project entered as a November start was a $66 million recreational facility replacement in Madison WI. Weaker activity in November was also reported for public buildings (courthouses and detention facilities), down 51%; and transportation terminals, down 22%; although November did include a $175 million terminal improvement project at San Francisco International Airport. On the plus side, educational facilities climbed 12% in November, aided by groundbreaking for a $421 million research laboratory at the University of California in Merced CA, a $237 million research facility at the University of California in San Francisco CA, and a $180 million corporate learning campus in Orlando FL. Healthcare facilities improved 4% in November, helped by the start of a $152 million hospital addition in Newark DE and the $150 million Oklahoma University medical center patient tower in Oklahoma City OK. Religious buildings also strengthened in November, rising 5%.