Just four of the top-10 metropolitan areas for commercial and multifamily construction reported increased investment in 2018, according to Dodge Data & Analytics. The remaining six experienced decreases.
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Robert Murray, chief economist for Dodge Data[/caption]
The New York metropolitan area, at $28.7 billion in 2018, continued to be the leading market for commercial and multifamily construction starts, advancing 10% after its 13% drop in 2017. The New York share of the U.S. was 14% in 2018, up from 13% in 2017, although not as high as its peak 19% share reported in 2015.
The next three markets in the 2018 top-10 all showed gains relative to 2017 were Washington, D.C. ($9.5 billion), up 28%; Boston ($9.2 billion), up 72%; and Miami ($8.2 billion), up 19%. The remaining six markets in the top-ten with their declines relative to 2017 were Los Angeles ($7.0 billion), down 11%; Dallas-Ft. Worth, Texas ($6.9 billion), down 16%; Chicago ($6.7 billion), down 1%; San Francisco ($6.0 billion), down 18%; Atlanta ($5.7 billion), down 14%; and Seattle ($5.7 billion), down 14%.
Of the metropolitan areas ranked 11 through 20, seven reported gains while three reported declines. At the national level, the volume of commercial and multifamily construction starts in 2018 was $212.4 billion, up 4%--a moderate rebound after a 3% decrease in 2017.
For the metropolitan areas ranked 11 through 20, the seven the experienced greater activity in 2018 compared to 2017 were: Houston ($4.5 billion), up 9%; Austin, Texas ($4.0 billion), up 22%; San Diego ($3.1 billion), up 12%; Minneapolis-St. Paul, Minn. ($3.0 billion), up 16%; Phoenix ($2.8 billion), up 5%; Kansas City, MO-KS ($2.8 billion), up 46%; and Sacramento ($2.3 billion), up 44%.
The three metropolitan areas in this group with decreased dollar amounts of commercial and multifamily starts in 2018 were Philadelphia ($4.0 billion), down 6%; Denver ($2.8 billion), down 23%; and Orlando ($2.6 billion), down 19%.
The commercial and multifamily data includes office buildings, stores, hotels, warehouses, commercial garages, and multifamily housing. Not included in this ranking are institutional building projects (e.g., educational facilities, hospitals, convention centers, casinos, transportation terminals), manufacturing buildings, single-family housing, public works, and electric utilities and gas plants.
The 4% increase for commercial and multifamily construction starts at the U.S. level in 2018 reflected greater activity for multifamily housing, up 8% to $95.1 billion, and the commercial building categories as a group, up 1% to $117.3 billion. Multifamily housing in 2017 had fallen 8% after appearing to have reached a peak in 2016, before posting the 8% rebound in 2018. After surging 23% in 2016, commercial building starts have shown slight improvement, edging up 1% in both 2017 and 2018.
“The brisk expansion for the U.S. economy during 2018 enabled market fundamentals for commercial building and multifamily housing to strengthen, after having shown some erosion during the previous year,” said Robert A. Murray, chief economist for Dodge Data & Analytics. “This provided the backdrop for the healthy volume of commercial and multifamily construction starts that took place during 2018. A further boost came as a number of very large projects reached groundbreaking last year.”
