Total construction starts fell 7 percent in October to a seasonally adjusted annual rate of $1.1 trillion, according to Dodge Construction Network. Nonbuilding and residential starts fell 32 percent and 1 percent. Conversely, nonresidential building starts gained 8 percent during the month.
Regionally, total construction starts in October fell in the Midwest, South Atlantic, South Central, and West regions, but rose in the Northeast.
Year-to-date through October, total construction starts were 4 percent below 2022. Residential and nonresidential starts were down 15 percent and 7 percent; however, nonbuilding starts were up 20 percent. For the 12 months ending in October, total construction starts were down 1 percent. Nonbuilding starts were 22 percent higher, and nonresidential building starts gained 1 percent. On a 12-month rolling basis, residential starts posted a 15 percent decline.
“Construction starts have weakened over the last two months as high interest rates and tight credit have restrained activity,” says Richard Branch, chief economist at Dodge Construction Network. “While it seems likely that the Federal Reserve will hold off raising rates further, it will take time until they consider easing. This will likely result in a continued softening in construction starts over the next several months.”
Nonbuilding construction starts lost 32 percent in October, falling to a seasonally-adjusted $231 billion. A decline in utility/gas starts drove category starts to a 12-month low. Miscellaneous nonbuilding stars dropped 20 percent, and environmental starts were 15 percent lower. However, highway and bridge starts improved 6 percent in October. Year-to-date through October, nonbuilding starts were up 20 percent overall. Utility/gas plants rose 52 percent, and miscellaneous nonbuilding starts increased 18 percent. Highway and bridge starts gained 9 percent, and environmental public works rose 13 percent.
For the past 12 months ending in October, total nonbuilding starts were 22 percent higher than in the 12 months ending in October 2022. Utility/gas plant and miscellaneous nonbuilding starts rose 56 percent and 15 percent. Highway and bridge starts were up 11 percent and environmental public works starts were 15 percent higher on a 12-month rolling sum basis. Overall, the success in nonbuilding starts prevented further declines in the overall monthly starts values.
The largest nonbuilding projects to break ground in October were a $319 million Newton-Weston bridge replacement in Newton, Mass., $300 million Cadence Solar Center in York Township, Ohio, and $280 million Estonian Solar project in Cooper, Texas.
Nonresidential building starts rose 8 percent in October to a seasonally adjusted annual rate of $490 billion. The increase was led by the groundbreaking of several very large manufacturing plants during the month. If not for those plants total commercial starts would have lost 28 percent. Commercial starts dropped 18 percent during the month due to a very sharp pullback in office activity, while institutional starts fell 15 percent, despite a solid gain in health care starts. Year-to-date through October, total nonresidential starts were 7 percent lower than 2022. Institutional starts gained 4 percent, while commercial and manufacturing starts fell 10 percent and 20 percent.
For the past 12 months ending in October, total nonresidential building starts were 1 percent higher than that ending October 2022. Manufacturing starts were 2 percent higher, institutional starts improved by 5 percent, and commercial starts lost 4 percent.
The largest nonresidential building projects to break ground in October were a $7.5 billion Micron semiconductor fabrication facility in Boise, Idaho, $2.2 billion Hyundai/LG EV battery plant in Ellabell, Ga., and $1.5 billion Nucor Sheet Mill in Apple Grove, W.Va.
Residential building starts fell 1 percent in October to a seasonally adjusted annual rate of $385 billion. Single family starts lost 2 percent, while multifamily starts were flat. On a year-to-date basis through October, total residential starts were down 15 percent. Single family starts dropped 17 percent, and multifamily starts were down 12 percent.
For the 12 months ending in October, residential starts were 15 percent lower than in 2022. Single family starts were 20 percent lower, while multifamily starts were down 7 percent on a rolling 12-month basis.
The largest multifamily structures to break ground in October were a $364 million QPX mixed-use tower in Long Island City, N.Y., $350 million mixed-use building on West 37th Street in New York City, and $225 million first phase of Baccarat Residences in Miami.
