Behind the strength of manufacturing and infrastructure construction, total construction starts increased by 27% in December to a seasonally adjusted annual rate of $1.185 trillion, according to data released by Dodge Construction Network (DCN).

December’s jump follows an 18% decrease in total construction starts in November, resulting from continued volatility in the construction industry.

For December, nonresidential building starts rose by 51% and residential starts rose by less than 1%. Throughout 2022, total construction starts were 15% higher than in 2021. Nonresidential building starts rose 38% over the year, while residential starts were down 3%.

“December starts revealed where the current strength in the construction lies: manufacturing and infrastructure,” says Richard Branch, chief economist for DCN. “It is those segments that will provide insulation for the sector as the economy softens in 2023. Recession or not, higher interest rates will weigh on the economy and restrain construction starts in 2023. However, it’s encouraging to know that the new year is starting with a great deal of positive momentum.”

Data provided by DCN shows that nonresidential building starts gained 51% in December to a seasonally adjusted annual rate of $549.6 billion. In December, manufacturing starts rose 596% from November to December. Institutional starts gained 11%.

Commercial starts, however, dropped 10% in December due to a pullback in office and hotel starts. In 2022, nonresidential construction rose 38% from 2021. Manufacturing construction activity led all gains, rising 185% over the year. Commercial starts were 25% higher in 2022, led by office and hotel activity. Institutional starts were 19% higher in 2022, led by improvements in healthcare and education projects.

The largest nonresidential building projects to break ground in December were the $8.5 billion Golden Triangle Ethylene Cracker in Orange, Texas, the $2 billion AltAir/World Energy renewable fuels facility in Paramount, Calif., and the $1.4 billion Stellantis electric vehicle plant in Kokomo, Ind.

Residential building starts remained flat in December at a seasonally adjusted annual rate of $353.8 billion. Single-family starts lost 5%, while multifamily starts rose 8%. Residential starts were 3% lower in 2022 when compared to 2021. Multifamily starts were up 25%, while single-family housing slipped 13%.

The largest multifamily structures to break ground in December were the $350 million first phase of the Hamilton Green complex in White Plains, N.Y., a $240 million mixed-use project on Dekalb Ave. in Brooklyn, N.Y., and the $230 million 54 Crown Street building in Crown Heights, N.Y.