According to Dodge Construction Network, total construction starts decreased 27% in January to a seasonally adjusted annual rate of $865.6 billion.
Nonresidential building starts plummeted 38% during the month, residential building starts down 20%, and nonbuilding starts fell 16%.
In comparison, overall building in January 2023 was 14% lower than in January 2022. Nonresidential building starts fell 2%, nonbuilding starts increased 10%, and residential building starts fell 34%. Total building starts were 13% higher in the 12 months ending January 2023 than in the 12 months ending January 2022. Nonresidential starts increased 36%, residential starts decreased 6%, and nonbuilding starts increased 19%.
“January’s decline in construction starts should not be taken as the beginning of a cyclical downturn in the industry,” Dodge Construction Network’s head economist, Richard Branch, stated. “Numerous mega-projects have begun over the last few months, obscuring the underlying trend in construction activity. While some construction sectors will face stress as the year progresses, current fundamentals point to an industry that is fairly well positioned to weather the storm.”
In January, nonbuilding construction starts plummeted 16% to a seasonally adjusted annual rate of $237 billion. The reason for the dip was a sharp reduction (-76%) in utility/gas plant starts following a strong December. Environmental public works starts grew 22%, other nonbuilding starts increased 17%, and highway and bridge starts increased 1%.
Total nonbuilding starts were 18% higher in the year ending January 2023 than in the year ending January 2022.
Utility/gas plant construction increased by 28%, while highway bridge construction increased by 20%. On a rolling 12-month basis, environmental public works starts and miscellaneous nonbuilding starts were up 17% and 5%, respectively.
The $750 million High Banks wind farm in Belleville, Kansas, the $570 million first phase of the Highway 69 express toll lanes in Overland Park, Kansas, and the $492 million CEPP/EAA reservoir in Palm Beach, Florida were the largest nonbuilding projects to break ground in January.
In January, nonresidential building starts fell 38% to a seasonally adjusted annual rate of $340 billion. Factory starts fell 91% in January, following the start of several significant projects in December. Commercial starts fell 11% in January, with only office posting a gain, while institutional starts grew by 3%, thanks to a strong increase in education beginnings.
Total nonresidential building starts were 36% higher in the year ending January 2023 than in the year ending January 2022. On a 12-month rolling total basis, manufacturing starts increased 190%, commercial starts increased 22%, and institutional starts increased 17%.
The $1 billion Prime Data Center campus in Elk Grove Village, Illinois, the $515 million Amazon data center in Hilliard, Ohio, and the $460 million CoStar Group corporate campus in Richmond, Virginia were the largest nonresidential building projects to start ground in January.
In January, residential construction starts plunged 20% to a seasonally adjusted annual rate of $289.2 billion. Single-family starts declined by 5%, while multifamily starts fell by 37%. Residential starts were 5% fewer in the year ending January 2023 than in the year ending January 2022. On a rolling 12-month basis, single-family starts were 16% lower, while multifamily starts were 21% higher.
A $200 million mixed-use building in Gowanus, New York, a $172 million mixed-use building in Greenpoint, New York, and the $150 million The Cove residential neighborhood in Sacramento, California were the largest multifamily constructions to break ground in January.
Total construction starts dropped in all five regions in January.
Amazing Builder Partners
