Dodge Data Shows Decline in Nonresidential Projects as Housing Starts and Permits Soar

Unlike this week’s U.S. Census Bureau’s Housing Starts and Permits report for July, which indicated a strong rebound in residential building, the three private measures of recent and expected nonresidential construction activity were all in the negative. According to the Dodge Data & Analytics (DD&A) total construction starts fell -7% from June to July, at a seasonally adjusted rate. Richard Branch, DD&A chief economist said, “The decline was due to a significant pullback in the nonbuilding segment, which fell 31% from June to July. Nonresidential building starts rose 3% while starts in residential building increased by 2%. Year-to-date through seven months, starts declined -15% from the same period in 2019. Nonresidential starts plummeted -25%, nonbuilding starts dropped -20%, and residential starts slipped -4%. Branch however cautioned “While one month doesn’t constitute a trend, the potential risk to construction from the rising number of COVID cases in these regions is significant.”