October 26, 2025
Construction Starts Rise on Strong Commercial Activity
$1+ billion projects get rolling in Louisiana, New York and Texas
Total construction starts showed improvement in September, rising 3.1% to a seasonally adjusted annual rate of $1.26 trillion, according to Dodge Construction Network. The gains were driven primarily by an 11.9% surge in nonresidential building starts and a 3.6% uptick in residential activity, even as nonbuilding construction slipped 6.2%. On a year-to-date basis through September, total construction starts edged up 3.5% from last year, with nonresidential leading the way at 5.0% growth while residential activity declined 4.2% and nonbuilding posted a solid 10.8% increase.
For the 12-month period ending September 2025, total construction starts climbed 6.7% compared to the same period in 2024. While residential starts dipped 1.4%, nonresidential activity advanced 6.8% and nonbuilding surged 16.7%, highlighting the shifting dynamics within the construction sector as megaprojects continue to reshape the landscape.
Market Analysis
"September construction starts data marks the third month of steady improvements. However, a 3% growth rate is just keeping up with inflation, and we need fourth quarter growth of 25% to match annual growth of 2024. Megaprojects continue to provide significant report; just six projects accounted for 12% of the total value in September."
Total Construction Starts
Nonresidential Building
12-Month Growth
Nonresidential Building Performance
Nonresidential building starts increased 11.9% in September to a seasonally adjusted annual rate of $478 billion. Commercial starts were up 21.2%, as only retail failed to grow over the month. Most notably, parking and service stations starts rose 30.1% and offices increased 32.6% between August and September. Institutional starts improved 0.9%, where strong activity in education and dorms (+25.8% m/m), other institutional categories (+11.9% m/m) offset a large decline in health care facilities (-47.8% m/m). Manufacturing activity remains volatile, as the sector jumped 45.2% in September, following last month's 24.4% drop.
Strong Growth Sectors
- Manufacturing: +45.2% month-over-month
- Offices: +32.6% month-over-month
- Parking & Service Stations: +30.1% month-over-month
- Education & Dorms: +25.8% month-over-month
- Commercial Overall: +21.2% month-over-month
Declining Sectors
- Health Care Facilities: -47.8% month-over-month
- Retail: Negative growth in September
Residential Building Performance
Residential building starts increased 3.6% in September to a seasonally adjusted annual rate of $379 billion. Single family starts increased 1.7%, while multifamily starts expanded 6.4%. On a year-to-date basis through September, residential starts are down 4.2% – with single family starts down 12.1% and multifamily starts up 13.2%.
12-Month Residential Performance
Regional Performance
Nonbuilding Construction Performance
Nonbuilding construction starts fell 6.2% in September to a seasonally adjusted annual rate of $404 billion. Utilities (-62.5% m/m) was the sole category contracting, while highway and bridges (+7.4% m/m), environmental public works (+6.6% m/m), and miscellaneous nonbuilding (+116.5% m/m) starts offset the decline. On a year-to-date basis through September, nonbuilding starts were up 10.8%, alongside gains in highways and bridges (+7.4%), miscellaneous nonbuilding (+42.1%), and utilities (+12.9%). Conversely, environmental public works starts are down 2.2% year-to-date through September.
12-Month Nonbuilding Performance
Data Source: Dodge Construction Network
Construction starts data represents the value of new construction projects entering the building phase, shown as seasonally adjusted annual rates.
