Total construction starts fell 5 percent in June to a seasonally adjusted annual rate of $932.3 billion, according to Dodge Construction Network. Nonresidential building starts lost 14 percent during the month and residential was 6 percent lower. On the contrary, nonbuilding starts gained 13 percent in June due to the start of several large solar projects.
Year-to-date, total construction was 5 percent higher in the first six months of 2022 compared to the same period of 2021. Nonresidential building starts rose 13 percent and residential starts gained 3 percent, while nonbuilding starts were 2 percent lower. For the 12 months ending June 2022, total construction starts were 7 percent above the 12 months ending June 2021. Nonresidential starts were 17 percent higher, residential starts gained 5 percent and nonbuilding starts were down 2 percent.
“Construction markets are getting jittery as the odds of recession increase,” says Richard Branch, chief economist for Dodge Construction Network. “While projects are still moving through the planning process, the velocity has downshifted reflecting uncertainties over how rising interest rates will impact the economy, construction material prices, and ultimately, construction starts. Over the short-term, construction-facing indicators are likely to be more volatile than normal, particularly in the commercial sector.”
Below is the breakdown for construction starts:
- Nonbuilding construction starts rose 13 percent in June to a seasonally adjusted annual rate of $203.0 billion. Powering the increase was a sharp rise in the utility/gas category due to the start of a large solar project in Nevada and a transmission line through Utah and Wyoming. Miscellaneous nonbuilding starts rose 21 percent in June, while highway and bridge starts lost 6 percent and environmental starts slid 16 percent. Through the first six months of the year, total nonbuilding starts were 2 percent lower than in 2021. Highway and bridge starts gained 15 percent through six months, but environmental public works projects were 4 percent lower. At the same time, miscellaneous nonbuilding starts dropped 19 percent and utility/gas plants starts plunged 28 percent through six months.
For the 12 months ending June 2022, total nonbuilding starts were 2 percent lower than in the 12 months ending June 2021. Environmental public works starts were up 3 percent and street/bridge starts gained 7 percent. Miscellaneous nonbuilding starts were 27 percent lower and utility/gas plant starts were down 5 percent.
The largest nonbuilding projects to break ground in June were the $2 billion PacificCorp Segment F – Aeolus to Mona transmission line in Utah and Wyoming, the $1.3 billion Gemini Solar Project in Las Vegas and the $650 million NICTD South Shore train line in Indiana.
- Nonresidential building starts dropped 14 percent in June to a seasonally adjusted annual rate of $301.0 billion. It was a broad-based decline for the month, with commercial starts falling 16 percent, manufacturing starts down 14 percent, and institutional starts moving 12 percent lower. Through the first six months of 2022, nonresidential building starts were 13 percent higher than during the first six months of 2021. Commerical starts advanced 14 percent and institutional starts rose 1 percent, while manufacturing starts were 83 percent higher on a year-to-date basis.
For the 12 months ending June 2022, nonresidential building starts were 17 percent higher than in the 12 months ending June 2021. Commercial starts grew 13 percent, institutional starts rose 7 percent, and manufacturing starts swelled 109 percent on a 12-month rolling sum basis.
The largest nonresidential building projects to break ground in June were an $800 million Facebook data center in Los Lunas, N.M., the $400 million Exxon LaBarge carbon capture plant in Fontenelle, Wyo., and the $287 million first phase of the Houston Methodist Cypress Bed hospital tower in Cypress, Texas.
- Residential building starts fell 6 percent in June to a seasonally adjusted annual rate of $428.3 billion. Single family starts dropped 7 percent and multifamily starts were 3 percent lower. Through the first six months of 2022, residential starts were 3 percent higher than in the first six months of 2021. Multifamily starts were up 23 percent, while single family housing slipped 4 percent.
For the 12 months ending June 2022, residential starts improved 5 percent from the same period ending June 2021. Single family starts were 2 percent lower and multifamily starts were 25 percent stronger on a 12-month rolling sum basis.
The largest multifamily structures to break ground in June were the $450 million Neptune/Sixth mixed-use project in Brooklyn, N.Y., the $425 million 250 Water Street apartments in New York, N.Y., and the $369 million 5th & Colorado mixed-use building in Austin, Texas.
Regionally, total construction starts in June rose in the Northeast and the West, but fell in the Midwest, South Atlantic, and South Central.