Total construction starts fell 9% in August to a seasonally adjusted annual rate of $1.25 trillion, reports the Dodge Construction Network. The drop follows a surge in construction starts in July thanks to the start of five large projects.
In August, nonresidential building starts rose 7% and residential starts were 1% higher. Nonbuilding starts, however, lost 36%.
“While construction start activity continues to be dominated by mega-projects like chip fabrication plants, the middle and lower end of the value spectrum is holding up well,” says Richard Branch, chief economist for Dodge Construction Network. “This is a sign that organic growth in the construction sector has not yet been undermined by the concern of a potential recession in 2023. While higher interest rates may undo this support in the coming months, the industry is in a very good position to continue modest growth.”
Year-to-date, total construction was 16% higher in the first eight months of 2022 compared to the same period of 2021. Nonresidential building starts rose 35% over the year, residential starts were 1% higher and nonbuilding starts were up 21%.
Nonbuilding construction starts fell 36% in August to a seasonally adjusted annual rate of $278.8 billion. The largest nonbuilding projects to break ground in August were the $1.9 billion third phase of the New Soo Lock Chamber in Sault Ste Marie, Mich., a $738 million paving project in Honolulu and the $460 million first phase of the Sand Island wastewater treatment plant in Honolulu.
Nonresidential building starts moved 7% higher in August to a seasonally adjusted annual rate of $569.6 billion. The largest nonresidential building projects to break ground in August were the $9.5 billion New Terminal One at JFK airport in Jamacia, N.Y., the $8.5 billion Samsung chip fabrication plant in Taylor, Texas, and the $1.1 billion Gaylord Pacific Hotel and Convention Center in Chula Vista, Calif.
Residential building starts rose 1% in August to a seasonally adjusted annual rate of $400.7 billion. The largest multifamily structures to break ground in August were the $700 million Aria Reserve residential tower in Miami, Fla., the $500 million 30 Van Ness mixed-use tower in San Francisco, Calif., and the $500 million 42-02 Orchard Street mixed-use tower in Long Island City, N.Y.