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, respectively. Conversely, nonresidential building starts gained 8 percent during the month.
Through 10 months of 2023, total construction starts were 4 percent below that of 2022. Residential and nonresidential starts were down 15 percent and 7 percent, respectively. In that time, nonbuilding starts were up 20 percent.
For the 12 months ending October 2023, total construction starts were down 1 percent. Nonbuilding starts were 22 percent higher, and nonresidential building starts gained 1 percent. Year over year, 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
Nonbuilding construction starts lost 32 percent in October, falling to a seasonally adjusted rate of $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 in the month. Highway and bridge starts saw a 6 percent improvement in October.
Through 10 months of 2023, nonbuilding starts are up 20 percent overall. Utility/gas plants rose 52 percent, and miscellaneous nonbuilding starts increased 18 percent. Highway and bridge starts gained 9 percent over the first 10 months of 2023, and environmental public works rose 13 percent.
Overall, the success in nonbuilding starts prevented further declines in the overall monthly starts values, according to Dodge Construction Network.
The largest nonbuilding projects to break ground in October were the $319 million Newton-Weston bridge replacement in Newton, Massachusetts, the $300 million Cadence Solar Center in York Township, Ohio, and the $280 million Estonian Solar project in Cooper, Texas.
Nonresidential construction
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. If not for the plants, total commercial starts would have lost 28 percent, Dodge says.
Commercial starts dropped 18 percent during the month due to a sharp pullback in office activity, while institutional starts fell 15 percent – despite a solid gain in health care starts.
Through October 2023, total nonresidential starts are 7 percent lower than that of 2022. Institutional starts are up 4 percent, while commercial and manufacturing starts fell 10 percent and 20 percent, respectively.
The largest nonresidential building projects to break ground in October were the $7.5 billion Micron semiconductor fabrication facility in Boise, Idaho, the $2.2 billion Hyundai/LG EV battery plant in Ellabell, Georgia, and the $1.5 billion Nucor Sheet Mill in Apple Grove, West Virginia.
Residential construction
Residential building starts fell 1 percent in October to a seasonally adjusted annual rate of $385 billion.
Single-family starts lost 2 percent in the month while multifamily starts were flat.
On a year-to-date basis through October 2023, total residential starts were down 15 percent. Single-family starts dropped 17 percent in that time, and multifamily starts were down 12 percent.
The largest multifamily structures to break ground in October were the $364 million QPX mixed-use tower in Long Island City, New York, the $350 million mixed-use building on W37th Street in New York and the $225 million first phase of the Baccarat Residences in Miami.
