A typical change for construction starts between February and March is around +2.5%. This year, however, dwarfed that, as commercial construction starts climbed 18% from February to March to $28.5 billion, Construction Market Data reports. This is a significant spike even when compared to the typical March to April jump of 12%.
While the number of starts in March 2016 was not much different from March 2015 (+1.6 percent), the number of starts over the first three months of 2016 was 9.8% higher than the first quarter of 2015. The report also notes that February’s starts underwent an upward revision from $19.1 billion to 24.1 billion. The largest adjustments occurred in the structure categories of parking garages, private office buildings, and hospitals/clinics.
The construction sector added 37,000 jobs in March, which is the largest gain so far this year. The first three months of the year have seen an average gain of 25,000 jobs, or an increase of 7.1 percent compared to the 23,000 job-per-month average in Q1 2015. The year-over-year employment in construction for March was 4.7 percent, much faster than the pace for all jobs in the economy. March’s jobless rate for the construction sector was 8.7 percent, not great, but an improvement of March 2015’s 9.5 percent.
Among the types of construction that make up nonresidential building, commercial structures and institutional structures saw the largest change between the first quarter of 2016 and the first quarter of 2015 at +19.9% and +19.5% respectively. Heavy engineering has seen a smaller increase at 5.8%. Meanwhile, industrial construction dropped 59.3%.
Private office buildings accounted for the majority of construction starts in the commercial category with a total of $6.059 billion in the first quarter. Among institutional structures, school and college starts have been responsible for over half of the category’s construction so far with a total of $13.426 billion. Roads and bridges made up over a third of the heavy engineering category with $10.967 billion.
The South and the West saw the largest increases in commercial construction between first quarter 2015 and first quarter 2016 while the Midwest and Northeast saw regressions. The West was up 27.6% from 2015 and the South was up 18%. The Midwest dropped 9.1% and the northeast dropped 6.6%. On the whole, the U.S. has seen a 9.8% increase between 2015 and 2016 so far.
Overall, nonresidential building and engineering/civil work accounts for 62% of total construction in the country with residential activity accounting for 38%.
All of the starts figures found throughout CMD’s report are not seasonally adjusted or altered for inflation. They are expressed in ‘current’ as opposed to ‘constant’ dollars.
To read the report in its entirety and to view accompanying graphs, click here.