September 28, 2026
Construction Starts Retreat From Recent Peak
August activity fell 25%, while longer-term construction growth remained strong
A 24.8% monthly drop in total construction starts reads like an alarm bell, but the August numbers from Dodge Construction Network tell a more nuanced story. July was the anomaly. A wave of megaprojects, led by massive manufacturing starts, pushed activity to an extraordinary peak, and August simply came back to earth. Measured against the longer arc, the market remains firmly in expansion, with starts running well ahead of last year's pace both year to date and over the trailing twelve months.
Look beneath the surface, though, and the growth rests in remarkably few hands. Data centers, semiconductor plants and energy infrastructure are carrying the load, while much of the broader building market wrestles with deepening labor shortages and climbing material costs. For lighting manufacturers, agents and contractors, that divergence matters, because opportunity is increasingly clustered in specialized, high-value project types and in a handful of regions. Here are highlights from this month's Dodge Construction Network construction starts report:
Total Starts
Annual Rate
YTD Performance
Market Analysis
"After a pop in activity last month, construction starts largely normalized throughout August. Abstracting from the month-to-month volatility, the story remains consistent. Data center, semiconductor and energy construction are driving growth, while several other sectors are facing subdued activity alongside deeper labor shortages, and accelerating material prices."
Sector Performance Highlights
Gaining Sectors
- Hotels (+302.2%): Roughly quadrupled after a weak July
- Healthcare (+96.1%): Rebounded to normal levels following a soft July
- Retail (+26.9%): One of only two commercial categories to post gains
- Single Family (+0.4%): Essentially flat for the month
- Environmental Public Works (+0.4%): The lone nonbuilding category to edge higher
Slowing Sectors
- Manufacturing (-80.8%): Pulled back sharply after July's megaproject starts
- Commercial (-37.6%): Offices and data centers fell 31.3%, parking garages 24.9% and warehouses 13.4%
- Institutional (-18.1%): Education slipped 14.3% and miscellaneous institutional dropped 39.1%
- Multifamily (-13.5%): Gave back ground after recent strength
- Nonbuilding (-26.7%): Miscellaneous nonbuilding fell 70.5%, highways and bridges 20.8% and utilities 11.4%
Year-to-Date Performance (Through August 2026)
Within nonresidential, commercial and industrial starts are up 47.7% year to date while institutional is down 3.9%. Multifamily is up 3.0% and single family is down 4.6%. On the nonbuilding side, electric power and utilities have surged 69.9%.
12-Month Subsector Snapshot (Aug 2025 vs Aug 2026)
Largest Projects Breaking Ground in August
Regional Performance (Month-over-Month)
Headwinds Beyond the Megaprojects
The concentration of growth is the story to watch. Commercial and industrial starts are up 47.7% year to date, powered largely by data centers, while institutional work and single family housing continue to trail last year. Dodge points to deeper labor shortages and accelerating material prices as pressures weighing on the sectors outside that high-growth core, which means monthly totals will likely keep swinging whenever a handful of billion-dollar projects break ground or fail to.
Data Source: Dodge Construction Network
Construction starts are presented as seasonally adjusted annual rates to account for normal seasonal variations in building activity.
