July saw a 17% boost in total construction starts, reaching a rate of $1.2 trillion, as revealed by the Dodge Construction Network. The surge was predominantly powered by nonbuilding starts, which leaped by 38%, attributed mainly to the launch of a significant LNG facility. Residential constructions increased by 20%, whereas nonresidential constructions dipped by 6%.
However, the cumulative construction starts up to July 2023 marked a 7% drop from 2022. Despite a 20% increase in nonbuilding starts, both residential and nonresidential starts noted declines, at 21% and 7% respectively, for the same period. A year-on-year comparison for the 12 months ending July 2023 showed a 3% overall increase in total construction starts.
Richard Branch, Dodge Construction Network’s Chief Economist, commented, “The construction industry is experiencing stagnation. Rising interest rates, labor deficits, and material costs are stifling the growth, showing limited progress in the past year.”
Nonbuilding Highlights
- July recorded a 38% increase, totaling $440 billion, largely due to the initiation of a major LNG facility.
- Without this LNG project, nonbuilding starts would have experienced a 7% decrease.
- Environmental public works surged 62%, credit to a large dock facility launch.
- Notably, nonbuilding starts decreased after the Buffalo Bills’ new stadium initiation in June.
- Key projects for the month included the $12 billion Rio Grande LNG facility in Texas and a $2.8 billion dock in Hawaii.
Nonresidential Highlights
- Nonresidential starts noted a 6% decrease in July, amounting to $334 billion.
- Commercial ventures rose 11% while institutional sectors saw an 11% decrease. Manufacturing plunged by 39%.
- Significant projects of the month featured a $405 million manufacturing plant in South Carolina and a $370 million office building in California.
Residential Highlights
- Residential starts amplified by 20% in July, hitting $414 billion.
- Single-family projects saw a minor 2% rise, but multifamily ventures skyrocketed by 62%.
- Key projects unveiled in July included the $1 billion Clarkson Square property in New York and a $365 million residential tower in North Carolina.
Regionally, while the South Atlantic, South Central, and West regions experienced growth in July, both the Northeast and Midwest observed a downturn.
