Nonresidential Building

Nonresidential building, at $224.9 billion (annual rate), surged 42 percent in February after a relatively weak performance in January. The manufacturing building category was a major contributor, soaring 663 percent in February with $3.0 billion for the estimated construction start cost of the Formosa ethane cracker and propane dehydrogenation plant in Point Comfort, Texas.

The next largest manufacturing building starts in February were considerably smaller in scale – a $169 million manufacturing research lab in California and a $43 million carpet manufacturing plant in Georgia. If the manufacturing building category is excluded, nonresidential building in February would still have registered a 19 percent gain.

The commercial building group grew 19 percent in February, with a varied performance by project type. Hotel construction bounced back 83 percent after a depressed January, led by $138 million for the hotel portion of the $400 million Four Seasons mixed-use tower in Boston and $108 million for the hotel portion of the $245 million Stadium Towers mixed-use project in Seattle.

Office construction in February climbed 19 percent, featuring groundbreaking for these projects – a $400 million office building at the Hudson Yards development site in New York, a $150 million office building in Seattle, and $112 million for the office portion of the Stadium Towers mixed-use project in Seattle. Both stores and warehouses registered a slower pace for construction starts in February, with stores down 9 percent and warehouses down 15 percent.

The institutional side of the nonresidential building market rebounded 20 percent in February after a lackluster January. Educational facilities, the largest nonresidential building category by dollar volume, grew 14 percent as it regained the upward momentum that was established in 2014.

Large educational facility projects that reached groundbreaking in February included a $133 million high school in Spring, Texas, a $67 million public safety training facility (for fire and rescue personnel) in Gaithersburg, Md., a $61 million high school in Maywood, Calif., and a $60 million business school at the University of California Berkeley. Healthcare facilities in February jumped 92 percent after a weak January, reflecting the start of these hospital projects – the $540 million Methodist Hospital North Campus Tower in Houston, the $228 million Northwestern Lake Forest Hospital in Lake Forest, Ill., and the $165 million Cambridge North Tower in Kansas City, Kan.

The smaller institutional categories in February were mixed, with gains reported for transportation terminals, up 27 percent; and public buildings, up 22 percent; while declines were reported for churches, down 26 percent; and amusement-related projects, down 45 percent.