A significant rebound was observed in construction starts during May, with an overall increase of 13%, signaling a positive shift following a sluggish April. Nonresidential and nonbuilding sectors led the growth, with jumps of 18% and 20%, respectively. Residential activity also saw a modest rise of 2%. Despite this encouraging upturn, total starts still trail behind figures from the same period last year. Concerns surrounding economic conditions and policy-related uncertainties remain key factors that could hinder sustained momentum moving forward.
The construction industry experienced a much-needed boost in May, offering temporary relief to contractors after a challenging start to the spring season. According to Dodge Construction Network, nonresidential building projects—which encompass offices, hotels, and healthcare facilities—showed strong gains, rising by 18%. Meanwhile, infrastructure-related work such as highways, bridges, and utility development surged by 20%. This uptick highlights a potential turnaround in project initiations, though experts caution that broader economic concerns may temper long-term optimism.
Among the most prominent projects to break ground in May was the $1.5 billion Sierra solar farm and storage initiative in Fallon, Nevada, reflecting growing investments in renewable energy. In Greenville, Mississippi, the $1.2 billion Delta Blues advanced power station began development, adding to the month’s momentum in the energy sector. California also saw major movement with the launch of the $1.2 billion BART train control modernization project in Oakland. Florida marked its presence with the $900 million SpaceX Starship GigaBay facility in Brevard County, further underscoring the mix of infrastructure and technology-driven developments gaining traction.
Nonbuilding construction starts reached a seasonally adjusted annual rate of $336 billion, driven largely by a dramatic surge in utility work, which rose by over 100%. Environmental public works also contributed positively with a 9% gain. However, highway and bridge projects saw a slight decline of 5% for the month. While these numbers reflect short-term optimism, year-to-date figures indicate a 2% drop compared to the previous year, with utility projects down 22% and environmental works falling by 5%. Highway and bridge activity remains a bright spot, showing a 6% year-over-year improvement.
On the residential front, starts edged upward by 2%, primarily fueled by a 15% increase in multifamily housing developments. Single-family home starts, however, declined by 5% in May. Year to date, total residential starts are down 5% compared to 2024 levels, with single-family projects falling 9% while multifamily remains resilient with a 5% increase. The mixed performance underscores shifting preferences in the housing market, where urban and rental-focused developments appear to be outperforming traditional single-family homebuilding trends.
While May brought a wave of optimism across multiple construction sectors, the underlying trend remains cautious. Although project initiations have improved, the cumulative figures for the year so far continue to lag behind last year’s totals. Economic uncertainty, trade policies, and fluctuating demand across residential and commercial markets all contribute to a complex outlook. Industry professionals will need to navigate these challenges carefully to sustain the recent upward trajectory.