Reed Construction Data (RCD) announced today that the year-to-date value of construction starts through February 2009, excluding residential contracts, totaled $41.7 billion, 12.6% more than in the first two months of 2008. Starts in the individual month of February fell 6% from January following a 23% drop in January versus December.

About half of January’s huge decline was reversed in February, allowing for the typically steep seasonal decline at this time of year. February starts, allowing for seasonality, were about 12% below November. However, note that project costs declined over this period, mostly for road and heavy projects

The starts data through February includes: (1) the impact of the September 2008 credit freeze; (2) much, but not most, of the impact of the deeper recession that it set off; and (3) little, if any, of the impact of the $800 billion additional federal spending approved in mid-February.

Another 1% or larger drop in job-site construction spending is expected in February as contractors slow or suspend work on projects already started. This is assured by the 104,000 construction workers laid-off last month.

The value of construction starts each month is summarized from RCD’s database of all active construction projects in the United States, excluding single-family homes. Missing project values are estimated using RSMeans’ building cost models.

Value of United States Construction Starts — February 2009
(Reed Construction Data)

Source: Reed Construction Data (RCD) and Property & Portfolio Research (PPR) (www.ppr.info).
Table: Reed Construction Data – CanaData.

The Northeast has a 26% year-to-date gain in project starts, followed by the South (19%), the Midwest (11%) and the West (-4%).

Heavy project starts rose 10% in February, primarily for power plants and bridges. Seasonality typically drops heavy starts more than 20% in February. Non-residential building project starts fell 13% to the lowest level since early 2004.

Starts of commercial buildings were approximately unchanged in February while institutional starts fell 21%, with an increase only for hospital projects. Strong February commercial starts were due entirely to a recovery in retail projects from an unusually low January. Nonetheless, commercial construction is expected to decline faster than institutional construction at least into the spring.

Click here if you would like to download this information as a PDF file