Dive brief:
- Total construction starts up 20% in December at a seasonally adjusted annual rate of $1.12 trillion after three months of declining activity in September, October and November, according to the Dodge Construction Network.
- Despite the big rebound in the last month of the year, total construction activity remained 4% lower than in 2022, the report said.
- “Construction starts ended the year on a positive note,” said Richard Branch, chief economist at Dodge Construction Network. “The planning queue is stabilizing and the promise of lower rates should boost construction. Even with headwinds such as scarce labor and tight credit, 2024 should be a more positive year for in the construction sector”.
Diving knowledge:
The year 2024 promises to continue generating positive momentum, largely due to the expectation of lower interest ratesBranch said.
The American Institute of Architects Architecture Billing Index, which tracks architectural design activity, also showed some positive signs, with fewer firms reporting a decline in turnover. The ABI is a leading indicator of construction activity over nine to 12 months.
Manufacturing is starting to pick up again
Among one of the favorites for an intensified activity this year, Manufacturing construction starts rebounded 75% in december
The subsector, made up of electric vehicle battery factories and semiconductor manufacturing plants, helped overall nonresidential building starts rise 37% in December to a seasonally adjusted annual rate of $479 billion, according to the report
Meanwhile, commercial starts, which include retail, office and warehouse projects, increased by 48%, with all subcategories registering considerable growth, the report said.
Institutional starts, which consist of health and education projects, rose 22% in December, largely due to growth in education, public building and recreational construction. Only health-related construction posted a decline in December, according to Dodge.
The largest non-residential building projects that began in December included:
- Texas Instruments’ $2.7 billion manufacturing plant in Sherman, Texas.
- The $1.1 billion OxyChem Orca project in La Porte, Texas.
- The $815 million University of Chicago Cancer Center in Chicago.
Non-building starts are showing a resurgence
After falling 32% in October and another 2% in November, non-building starts finally registered a rebound in the last month of 2023. The sector, which includes highways, streets, bridges, gas and environmental public works, rose 13% in December to a seasonally adjusted annual rate of $253 billion, the report said.
Each of these subcategories recorded gains in activity. Highway and bridge projects improved by 12%, gas plants increased by 15% and environmental public works increased by 8%. For all of 2023, non-construction starts rose 16%, according to Dodge.
The largest non-building projects that began in December included:
- The $1.3 billion Faraday Solar project in Elberta, Utah.
- The $425 million San Juan 1 solar farm in Farmington, New Mexico.
- The $300 million renovation of David Booth Kansas Memorial Stadium in Lawrence, Kansas.
Multi-family construction closes the year in growth
Residential building activity rose 8% in December to a seasonally adjusted annual rate of $391 billion.
Multifamily starts led the way, with a 22% increase in activity, followed by 1% growth in single-family residential in December.
In 2023, total residential construction was down 13%, with single-family and multifamily activity down 13% and 12%, respectively.
The largest multifamily structures that broke ground in December included:
- The $430 million Auberge South Beach Condo project in Miami Beach, Florida.
- The $325 million 2600 Biscayne mixed-use project in Miami.
- The $300 million mixed-use project at 55 Hudson St. in Jersey City, New Jersey.
