- Total construction starts jumped 8% in October to a seasonally adjusted rate of $1.12 trillion following two consecutive months of decline, according to a Dodge Construction Network report.
- Nonresidential building and nonbuilding starts gained 9% and 26%, respectively, while residential starts fell by 3% for the month, according to the report. Year to date through October, total construction starts posted a 16% gain from 2021. Nonresidential building starts rose 37%, nonbuilding kickoffs jumped 17% and residential commencements remained flat, according to the report.
- The rebound in starts signals the construction industry “continues to weather the storm of higher inflation rates,” said Richard Branch, chief economist for Dodge, in the report.
Following two consecutive declines in starts during August and September, Branch maintained last month that that the drop should “not be seen as a precursor to a cyclical pullback in the industry.”
Now, October’s rebound lends credence to that call, and signals the industry continues to fend off concerns of higher inflation rates, at least for now.
“While the residential sector is feeling the pain, the nonresidential building and infrastructure sectors are hitting their stride,” said Branch in the report. “Some weakness is to be expected as the Federal Reserve continues its battle with inflation. However, the damage should be isolated to a few verticals and not as widespread as what the industry witnessed during the Great Recession.”Nonbuilding construction starts rose 26% in October to a seasonally adjusted annual rate of $277.7 billion. The largest nonbuilding projects to break ground in October were:
- $576 million TX DOT Interstate Highway 820 reconstruction project in Fort Worth, Texas.
- $548 million TX DOT Interstate Highway 35 widening project in Austin, Texas.
- $364 million repaving project in Honolulu, Hawaii.
Nonresidential building starts rose 9% in October to a seasonally adjusted annual rate of $480.5 billion. The largest nonresidential building projects to break ground in October include:
- $3.2 billion Texas Instruments chip fabrication plant in Sherman, Texas.
- $2 billion General Motors Orion EV plant in Orion Township, Michigan.
- $1 billion Gevo Net-Zero 1 hydrocarbon plant in Lake Preston, South Dakota.
Regionally, total construction starts in October rose in the Midwest and South Atlantic, but fell in the South Central and West, according to the report.