In December 2024, the construction industry witnessed a mixed performance, as total construction starts decreased by 2% to a seasonally adjusted annual rate of $1.2 trillion, according to Dodge Construction Network. The decline was primarily driven by a significant drop in nonbuilding starts, which fell by 14%. However, there were positive signs in other areas, such as residential and nonresidential building starts, which grew by 4% and 2%, respectively. On an annual basis, total construction starts increased by 6% compared to 2023, reflecting a cautiously optimistic outlook for the sector despite ongoing challenges like labor shortages and material cost pressures.
The nonbuilding sector experienced a notable downturn in December, with a 14% decrease in starts to a seasonally adjusted annual rate of $322 billion. Environmental public works and miscellaneous nonbuilding projects saw particularly sharp declines, dropping by 18% and 36%, respectively. Highway and bridge starts also dipped by 5%, while utility/gas projects saw a slight increase of 1%. Despite these monthly setbacks, the nonbuilding sector showed resilience over the year, with total starts rising by 7% compared to 2023. Notable projects that broke ground in December included the $740 million Donald C. Tillman Advanced Water Purification Facility in Los Angeles and the $650 million Pulaski Solar Farm in Illinois.
In contrast, the nonresidential building sector demonstrated modest growth in December, with starts increasing by 2% to a seasonally adjusted annual rate of $482 billion. Commercial starts saw a 6% rise, driven by increases in data centers, hotels, and retail developments. Manufacturing starts surged by 19%, offsetting a 3% decline in institutional starts. Over the course of 2024, total nonresidential starts increased by 4%, with institutional projects leading the way at 16% growth. Major projects initiated in December included the $1.6 billion Lyndon B. Johnson Hospital Replacement in Houston and the $1.2 billion expansion of San Antonio International Airport's Terminal C.
The residential sector also showed strength, with starts growing by 4% in December to a seasonally adjusted annual rate of $397 billion. Multifamily housing starts soared by 24%, while single-family starts declined slightly by 3%. For the year, residential starts increased by 7%, with single-family housing up 15% and multifamily down 7%. Significant multifamily projects launched in December included the $510 million St. Regis Residences in Miami and the $350 million Reflections Lakeside Resort in Orlando.
Regionally, construction activity varied across the country, with gains in the Midwest and South Atlantic regions, but declines in the Northeast, South Central, and West. Experts predict that while challenges persist, the sector is likely to benefit from planned projects and potential Federal Reserve rate cuts, which could stimulate further growth in 2025.