BEDFORD, MA — December 19, 2024 — Total construction starts witnessed a significant 5% increase in November, reaching a seasonally adjusted annual rate of $1.2 trillion, as per Dodge Construction Network. Nonresidential building starts saw a 2% growth, nonbuilding starts surged by 16%, while residential building starts declined by 1%. On a year-to-date basis through November, total construction starts were up by 5% compared to the first 11 months of 2023. Nonresidential starts rose by 4%, residential starts increased by 7%, and nonbuilding starts also went up by 5%.

Construction Starts: A Wait for Rate Cuts

"Construction starts are currently moving in a sideways trend as the market patiently awaits further rate cuts," stated Richard Branch, the chief economist of Dodge Construction Network. "Elevated interest rates, labor shortages, and strict lending standards will continue to pose constraints on construction activity in the near term."

Nonbuilding Construction

In November, nonbuilding construction witnessed a remarkable 16% growth, reaching a seasonally adjusted annual rate of $368 billion. Environmental public works starts saw a substantial 63% jump, utility/gas starts moved 35% higher, and miscellaneous nonbuilding starts grew by 3%. However, highway and bridge starts fell by 11% in November. On a year-to-date basis through November, total nonbuilding starts were 5% higher than the previous year. Miscellaneous nonbuilding starts increased by 27%, environmental public works starts were 16% higher, highway and bridge starts improved by 6%, but utility/gas starts declined by 16%.For the 12 months ending November 2024, total nonbuilding starts were 4% higher than the 12 months ending November 2023. Miscellaneous nonbuilding starts were 27% higher, environmental public works gained 14%, highway and bridge starts increased by 6%, but utility/gas starts were down 18%.The largest nonbuilding projects to commence in November included a $2.9 billion Central Everglades Reservoir Embankment project in Palm Beach County, Florida, the $2.0 billion Bahia NGL Pipeline across several counties in Texas, and the $1.4 billion SR 520, I-5 to Montlake bridge replacement in Seattle, Washington.

Nonresidential Building Starts

Nonresidential building starts rose by 2% in November, reaching a seasonally adjusted annual rate of $470 billion. Commercial starts experienced a remarkable 43% increase during the month due to an upsurge in data center, warehouse, and parking garage starts. On the other hand, institutional starts fell by 9% following a strong gain in October. Manufacturing starts, which had a large gain in October, retreated and fell by 52%. On a year-to-date basis through November, total nonresidential starts were up by 4%. Institutional starts were 17% higher, commercial starts increased by 5%, and manufacturing starts were 33% lower.For the 12 months ending November 2024, nonresidential building starts were up by 2% compared to the previous 12 months. Manufacturing starts were down by 40%, commercial starts were up by 5%, and institutional starts were 18% higher. The largest nonresidential building projects to break ground in November were the $3.4 billion Brooklyn Detention Facility in Boerum Hill, New York, the $1.4 billion AWS Amazon data center in Ridgeland, Mississippi, and the $750 million Frontier Scientific cold storage facility in Wilmington, North Carolina.

Residential Building Starts

Residential building starts fell by 1% in November, reaching a seasonally adjusted annual rate of $371 billion. Single-family starts rose by 5%, while multifamily starts declined by 12%. On a year-to-date basis through 11 months, total residential starts were 7% higher. Single-family starts increased by 15%, and multifamily starts were down by 9%.For the 12 months ending November 2024, residential starts were 7% higher than the previous 12 months. Single-family starts were 16% higher, while multifamily starts were 9% lower on a 12-month rolling sum basis. The largest multifamily structures to break ground in November were the $675 million Utopia Living apartments in Flushing, New York, the $312 million Calyer Place residential building in Greenpoint, New York, and the $235 million Hoboken Connect mixed-use development in Hoboken, NJ.Regionally, total construction starts in November rose in the Northeast, South Atlantic, and West and South Central regions but fell in the Midwest.