Behind the strength of nonresidential construction, the number of total construction starts in May rose 4% to a seasonally adjusted annual rate of $979.5 billion, according to the Dodge Construction Network. Nonresidential building starts rose 20%, residential starts fell by 4% and nonbuilding starts lost 2% during the month.

The first five months of 2022 saw a 6% rise in total construction compared to 2021. Nonresidential building starts rose 17% and residential starts gained 3%, while nonbuilding starts were 5% lower.

“The construction sector has become increasingly bifurcated over the past several months,” said Richard Branch, chief economist for Dodge Construction Network. “Nonresidential building construction is clearly trending higher with broad-based resilience across the commercial, institutional and manufacturing spaces. However, growth in the residential market has been choked off by higher mortgage rates and rapidly falling demand for single-family housing. While the overall trend in construction starts is positive, the very aggressive stance taken by the Federal Reserve to combat inflation risks slowing the momentum in construction.”

Nonresidential building rose 20% in May to a seasonally adjusted annual rate of $355.1 billion. Commercial starts rose 35% thanks to a jump in office starts. Institutional starts rose 9% and manufacturing starts fell 5%. Through the first five months of 2022, nonresidential building starts were 17% higher than during the first five months of 2021. Commercial starts advanced 17% and institutional starts rose 2%, while manufacturing starts were 97% higher on a year-to-date basis.