Construction starts will likely remain volatile in the coming months, despite a recent bounceback in activity, said Richard Branch, chief economist of Dodge Construction Network.
Total construction starts rebounded 10% in July to a seasonally adjusted annual rate of $1.1 trillion, according to Dodge. The resurgence follows a significant decline in June, where total groundbreakings plummeted 19% due to a stark drop in utility and gas projects.
But activity in infrastructure construction and nonresidential sectors, such as retail, office and warehouse projects, drove an overall recovery in July, offsetting a slump in residential construction, according to the report.
“Construction starts showed great promise in July. However, the short-term remains questionable due to high interest rates,” said Richard Branch, chief economist of Dodge Construction Network, in the release. “The Federal Reserve is likely to cut interest rates in September, which will, over time, make market conditions more conducive to moving projects forward.”
Here are the top nine U.S. projects to break ground in July:
- The $2.1 billion Novo Nordisk plant in Clayton, North Carolina.
- The $1.6 billion first phase of the AWS Amazon data center in Canton, Mississippi.
- The $1.5 billion Revolution Wind offshore wind farm off the coast of Rhode Island.
- The $819 million Potomac River Tunnel in Washington, D.C.
- The $800 million Meta data center in Montgomery, Alabama.
- The $800 million Ryan Field Stadium at Northwestern University in Evanston, Illinois.
- The $300 million Music Row Albion apartment towers in Nashville, Tennessee.
- The $254 million Commodore Perry apartments in Buffalo, New York.
- The $250 million One Tampa condominiums in Tampa, Florida.
Year-to-date growth
Total construction starts rose 6% in the first seven months of the year compared to the same period in 2023, according to Dodge.
Nonresidential starts posted a 5% increase, while residential groundbreakings jumped 11%. Nonbuilding starts through the first seven months of the year posted no change compared to last year.
On a monthly basis, nonresidential construction starts improved 25% in July, largely due to significant activity in the manufacturing, data center and hotel sectors, according to Dodge. Institutional projects, such as healthcare, jumped 18% in July due to a sharp increase in healthcare starts.
Nonbuilding construction increased 19% in July due to positive activity in all subsectors, including highways, bridges, utility plants and gas plants. Residential starts, on the other hand, ticked down 8% in July, largely due to a 13% slowdown in single-family projects, according to Dodge.
