Project groundbreakings posted their largest increase of the year in April after a slow start, according to Dodge Construction Network.
Total construction starts rebounded 6% to a seasonally adjusted annual rate of $1.06 trillion, according to Dodge Construction Network. The increase reversed a two-month streak of declines in February and March, said Richard Branch, chief economist for Dodge Construction Network.
That’s largely due to stability around labor and material prices, Branch said.
“The rebound in starts in April was certainly good news for the sector,” said Branch. “While the uncertain timing of Fed interest rate cuts is causing concern, developers and owners are feeling reasonably confident that end-market demand will sustain project starts in some sectors.”
Here are the top nine projects to break ground in April:
- The $3.7 billion UC Davis Medical Center in Sacramento, California.
- The $1.8 billion Linde Blue Hydrogen plant in Beaumont, Texas.
- The $1 billion Scout Motors electric vehicle plant in Blythewood, South Carolina.
- The $834 million I-405 Brickyard improvement project in Bothell, Washington.
- The $533 million Flat Ridge wind farm in Harper and Kingman counties in Kansas.
- A $490 million resurfacing project in Lanai City, Hawaii.
- The $300 million 1690 Revere Beach Parkway in Everett, Massachusetts.
- The $270 million Innovative Urban mixed-use building in New York.
- The $160 million 120 E 144th St apartment building in Mott Haven, New York.
Starts post strong growth
Over the 12 months ending in April 2024, total construction starts inched higher by 2% from the previous year, according to Dodge.
Nonresidential starts, which include retail, office and warehouse projects, decreased 8% during the past year, while groundbreaking in residential and nonbuilding, which include highway, street, bridge, gas plants and environmental public works, gained 3% and 16%, respectively.
“Overall here, a pretty decent month and it continues to show that despite high interest rates, owners and developers feel reasonably confident about the state of the economy and use demand for construction projects,” said Branch. “Looking forward, we’re not expecting interest rates to come down anytime soon. Our forecast is calling for the first interest rate cut to be in September 2024.”
Sector performance
Nonresidential building starts climbed 17% in April, driven by a substantial increase in manufacturing projects, said Branch. Institutional projects, such as healthcare and education, also jumped 16% in April. Year to date nonresidential starts increased by 5%, indicating strong performance despite a challenging economic environment, according to Dodge.
Nonbuilding construction groundbreakings rose 4% in April, led by a 31% jump in environmental public works. Year to date, nonbuilding starts improved 14% from the same period last year, largely due to gains in highway and bridge projects.
Residential building starts inched lower 1% in April, according to the report. Single-family starts decreased 7% during the month, while multifamily starts increased by 13%. Despite the slight monthly decline, year to date residential groundbreakings were up 22%, while single-family starts soared 32%, according to Dodge.
“If you look at the level of projects in planning, there’s enough optimism here that there should be some stability over the coming months and as we start to see interest rates come down later in the year,” said Branch. “That should create a much more conducive environment for construction. We’ll start to see construction projects and construction starts accelerate from there.”
