According to the latest Dodge Report, total construction starts in the final month of 2019 dropped 21% from the previous month to a seasonally adjusted annual rate of $800.4 billion. The sharp decline was largely a response to hefty gains posted in November's utility and manufacturing sectors. When removing the influence of these two very volatile sectors, total construction starts only fell 3% in December. By major sector, nonresidential building starts fell 20% in December, while nonbuilding starts dropped 41%, and residential starts lost 4% over the month.
The pullback in December pushed the Dodge Index down to 169 (2000=100) compared to the 213 posted in November, and just below the 12-month average of 174.
For the full year, total construction starts were essentially flat when compared to 2018 at $817.6 billion. In 2019, nonbuilding starts gained 7% due to large gains in utility starts, while nonresidential starts fell 1% and residential starts declined 3%. Removing the massive 112% gain in utility starts from the total would result in total construction declining 3% from the previous year.
Nonbuilding construction fell 41% in December to a seasonally adjusted annual rate of $171.4 billion following an extremely strong November which saw the start of several large projects. The only category to post a gain in December was environmental public works, which increased 1%. Starts of electric utility/gas plants fell 76%, while highway and bridge starts fell 18% and miscellaneous nonbuilding starts dropped 17% from November to December.
For the full year of 2019, nonbuilding construction rose 7% thanks to a 112% gain in the electric utility/gas plant category. When removing that category from total nonbuilding, starts were down 8% for the year. Environmental public works gained 4% in 2019, while miscellaneous nonbuilding fell 19%. Highway and bridge starts were down 8% for year. Residential starts were 3% lower than in 2018. Single family starts ended 2019 down 1%, while multifamily starts lost 7% for the year.