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Total Construction Starts Post Big Gains in July, Yet Residential Slips
Total construction starts rose 48% year-over-year in July to a seasonally adjusted annualized $1.36 trillion, said Dodge Construction Network. The dollar-amount gains resulted from starts on three large manufacturing plants and two LNG export facilities.
However, even without these projects, total starts still would have increased 7%. Nonresidential building starts rose 79% in July, and nonbuilding starts jumped 120%. Conversely, residential starts decreased 8%.
“Mega-projects aside, construction continues to improve despite the pressure created by higher interest rates and labor scarcity,” said Richard Branch, chief economist for Dodge Construction Network. “Combined with the strong labor market, this is another indicator that the U.S. is not currently in a recession.
“However, the Federal Reserve will continue to aggressively raise interest rates until they feel that inflation is under control. This will create mounting pressure on building activity and potentially lead to a slowdown in construction starts by year-end.”
Pictured: Intel’s $10-billion semiconductor plant in Ohio, which broke ground in July. Rendering courtesy of Intel.
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