The value of commercial and multifamily construction starts in the top 20 metropolitan areas of the U.S. increased by 24% from 2021 throughout the first six months of 2022, according to the Dodge Construction Network.
Throughout the U.S., commercial and multifamily construction starts increased by 18% year-to-date. The number of commercial and multifamily starts in the top 10 metro areas of the country rose 28% in the first six months of 2022 compared to that of 2021.
The demand for apartments and condos helped the commercial and multifamily construction industry make large gains in 2022. This increase is impressive considering that the sector continues to combat rising prices, shortages of key materials and labor and higher interest rates, says the Dodge Construction Network.
However, not all is good news.
“The construction sector is at a crossroads,” says Richard Branch, chief economist for Dodge Construction Network. “The recovery from the pandemic morphed in 2022 by encompassing more sectors than just warehouses and single-family housing despite rampant inflation in construction materials, a lack of key goods and a stark shortage of skilled construction labor. Even though the level of projects currently in planning portends a bright second half to the year, the Federal Reserve’s fight against inflation has taken a toll on the economy and raised concerns that a recession could occur. As a result, construction starts are likely to move sideways over the second half of the year and potentially stall as the calendar shifts into 2023.”
The New York metropolitan area was the top market for commercial and multifamily starts during the first half of 2022 at $15.3 billion, an increase of 20% from the first half of 2021. The Dallas, Texas, metropolitan area was in second place, totaling $8.1 billion in the first six months of 2022, a 72% year-to-date gain. The Washington, D.C., metro area ranked third during the first half of 2022 with $5.5 billion in starts, a 35% gain over 2021.
During the first half of 2022, the top 10 metropolitan areas accounted for 40% of all commercial and multifamily starts in the U.S., up from 37% during the first six months of 2021. The remaining top 10 metropolitan areas through the first half of 2022 were:
- Miami, Fla., up 31% ($4.5 billion)
- Austin, Texas, up 70% ($4.3 billion)
- Phoenix, Ariz., up 53% ($4.2 billion)
- Atlanta, Ga., up 68% ($4.2 billion)
- Seattle, Wash., down 10% ($3.5 billion)
- Los Angeles, Calif., down 14% ($3.4 billion)
- Philadelphia, Pa., down 3% ($3.2 billion).
The second group of metro areas accounted for 16% of all commercial and multifamily starts in the U.S. during the first six months of 2022, down from 18% in the first half of 2021. The second-largest group included:
- Houston, Texas, up 20% ($3.2 billion)
- Boston, Mass., down 25% ($3.2 billion)
- Denver, Colo., up 29% ($2.8 billion)
- Orlando, Fla., up 66% ($2.6 billion)
- Tampa, Fla., up 83% ($2.5 billion)
- Chicago, Ill., down 1% ($2.4 billion)
- San Jose, Calif., up 186% ($2.1 billion)
- Nashville, Tenn., down 2% ($1.9 billion)
- Minneapolis, Minn., down 10% ($1.8 billion)
- Kansas City, Mo., down 1% ($1.7 billion)
Commercial and multifamily starts are comprised of office buildings, stores, hotels, warehouses, commercial garages and multifamily housing.