Total construction starts rebounded in April, increasing by 6% to reach a seasonally adjusted annual rate of $1.13 trillion, following a 1% decrease in March.
The growth in April was attributed to the optimism surrounding end-market demand, as stated by Richard Branch, the chief economist of Dodge Construction Network (DCN).
Nonresidential building starts saw a significant increase of 17%, while residential starts experienced a slight decline of 1%. Year-to-date data through April showed a 13% increase in total construction starts, with a notable 22% jump in residential starts and a 5% growth in nonresidential building starts.
Branch highlighted that the rebound in starts in April brought positive news for the sector, despite concerns about the uncertain timing of interest rate cuts. Developers and owners are relatively confident in the sustainability of project starts in certain sectors due to strong end-market demand. Although risks related to interest rates, labor, and material prices persist, the stability of project values in the planning phase indicates a level of future confidence.
In the nonresidential sector, building starts increased by 17% in April, reaching a seasonally adjusted annual rate of $423 billion. Manufacturing starts more than doubled during the month, driven by the initiation of two large projects. Institutional starts rose by 16%, influenced by growth in healthcare and transportation projects, while commercial starts decreased by 1%. Year-to-date data through April showed a 5% increase in total nonresidential starts, with institutional starts up by 19%, while commercial and manufacturing starts each witnessed a 6% decline.
Some notable nonresidential projects that broke ground in April include the $3.7 billion UC Davis Medical Center in Sacramento, California, the $1.8 billion Linde Blue Hydrogen plant in Beaumont, Texas, and the $1 billion Scout Motors EV plant in Blythewood, South Carolina.
Residential building starts declined by 1% in April, reaching a seasonally adjusted annual rate of $395 billion. Single-family starts fell by 7%, while multifamily starts saw a 13% increase. Year-to-date data through April indicated a 22% growth in total residential starts, with a significant 32% improvement in single-family starts and a 4% rise in multifamily starts.
The most significant multifamily structures that commenced construction in April included the $300 million 1690 Revere Beach Parkway in Everett, Massachusetts, the $270 million Innovative Urban mixed-use building in East New York, New York, and the $160 million 120 E144th Street apartment building in Mott Haven, New York.
Source: Dodge Construction Network’s with additional information added by GlassBalkan