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Posted November 24, 2015

New Construction Starts Climb 13 Percent in October

October's new construction starts grew 13 percent in October, according to Dodge Data & Analytics. The increase follows the lackluster showing of the two previous months. Much of the gain came from a sharp rebound by nonresidential building, while nonbuilding construction (public works, utility plants) decreased for the month. 


During the first ten months of 2015, total construction starts on an unadjusted basis were up 10 percent from the same period a year ago. Leaving out the volatile electric utility and gas plant category, which was boosted in early 2015 by the start of several massive liquefied natural gas (LNG) terminals, total construction starts during the first ten months of 2015 would be up 4 percent relative to last year.

October's data raised the Dodge Index to 125 (2000=100), compared to 111 in September.  The increase for October alleviates concern about a stalling expansion that may have arisen with the sluggish activity in August and September, stated Robert A. Murray, chief economist for Dodge Data & Analytics.  "The construction start statistics do show volatility on a month-to-month basis, and as a result trends in the near term are rarely smooth"

On balance, factors point to continued expansion for the industry, he added, with the U.S. economy showing moderate job growth, vacancy rates receding and rents rising.  For public works, there's been solid progress made by Congress towards finalizing the next federal multiyear transportation bill and there's less uncertainty with the selection of Paul Ryan as the new Speaker of the House of Representatives, he noted. 

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