Dodge Construction Network: Construction Starts Drop 7% in October

Total construction starts fell 7% in October to a seasonally adjusted annual rate of $1.1 trillion, according to Dodge Construction Network. Nonbuilding and residential starts fell 32% and 1%, respectively. Conversely, nonresidential building starts gained 8% during the month.

Year-to-date through October 2023, total construction starts were 4% below that of 2022. Residential and nonresidential starts were down 15% and 7%, respectively; however, nonbuilding starts were up 20%. For the 12 months ending October 2023, total construction starts were down 1%. Nonbuilding starts were 22% higher, and nonresidential building starts gained 1%. On a 12-month rolling basis, residential starts posted a 15% decline.

Nonresidential building starts rose 8% in October to a seasonally adjusted annual rate of $490 billion. The increase was led by the groundbreaking of several very large manufacturing plants during the month. If not for those plants total commercial starts would have lost 28%. Commercial starts dropped 18% during the month due to a very sharp pullback in office activity, while institutional starts fell 15%, despite a solid gain in healthcare starts. Year-to-date through October, total nonresidential starts were 7% lower than that of 2022. Institutional starts gained 4%, while commercial and manufacturing starts fell 10% and 20%, respectively.

For the past 12 months ending in October 2023, total nonresidential building starts were 1% higher than that ending October 2022. Manufacturing starts were 2% higher, institutional starts improved by 5%, and commercial starts lost 4%.

The largest nonresidential building projects to break ground in October were the $7.5 billion Micron semiconductor fabrication facility in Boise, Idaho, the $2.2 billion Hyundai/LG EV battery plant in Ellabell, Georgia, and the $1.5 billion Nucor Sheet Mill in Apple Grove, West Virginia.

Residential building starts fell 1% in October to a seasonally adjusted annual rate of $385 billion. Single family starts lost 2%, while multifamily starts were flat. On a year-to-date basis through October 2023, total residential starts were down 15%. Single family starts dropped 17%, and multifamily starts were down 12%. For the 12 months ending in October 2023, residential starts were 15% lower than in 2022. Single family starts were 20% lower, while multifamily starts were down 7% on a rolling 12-month basis.

The largest multifamily structures to break ground in October were the $364 million QPX mixed-use tower in Long Island City, New York, the $350 million mixed-use building on W37th Street in New York, New York, and the $225 million first phase of the Baccarat Residences in Miami, Florida.

Regionally, total construction starts in October fell in the Midwest, South Atlantic, South Central, and West regions, but rose in the Northeast.

Source: construction.com