Total construction starts decreased in September, reports the Dodge Construction Network (DCN). Total construction starts in September fell 19% to a seasonally adjusted annual rate of $1.02 trillion. This follows a 9% drop in August. In September, nonresidential building starts dropped 23% and residential starts fell 11%.

However, the DCN says that since September 2021, total construction was 16% higher in the first nine months of 2022 compared to the same time in 2021. Overall, nonresidential building starts rose 37% over the year, while residential starts were flat.

“September’s decline in construction starts should not be seen as a precursor to a cyclical pullback in the industry,” says Richard Branch, chief economist for the DCN. “The previous two months saw the start of several megaprojects, and the decline in September returns starts activity to its trend level. It is likely, however, that as interest rates move higher in the coming months, marginal construction projects may not get underway and construction activity will begin to settle back.”

The DCN reports that nonresidential building starts dropped 23% in September to a seasonally adjusted annual rate of $438.8 billion. In September, commercial starts rose 2%. This was led by office and warehouse starts, while institutional starts lost 39% despite solid growth in the education category. Manufacturing starts were 22% lower in September.

Through the first nine months of 2022, nonresidential building starts were 37% higher than the first nine months of 2021. Commercial starts grew 19%, and institutional starts rose 19%. Manufacturing starts were 240% higher on a year-to-date basis.

The largest nonresidential building projects to break ground in September were the $5.7 billion oil platforms in the Gulf of Mexico, the $2.9 billion Metro-North Penn Station Project in New York, N.Y., and the $800 million Meta data center in Kuna, Idaho.

Residential building starts fell 11% in September to a seasonally adjusted annual rate of $369.5 billion. Single-family starts lost 7%, while multifamily starts dropped 16%. Through the first nine months of 2022, residential starts were flat when compared to the same timeframe in 2021. Multifamily starts were up 25%, while single-family housing slipped 9%.

The largest multifamily structures to break ground in September were the $1 billion AEG Nashville Yards mixed-use project in Nashville, Tenn., the $300 million Sterling Okan building in Miami, Fla., and the $230 million Majestic mixed-use project in Gowanus, N.Y.