A surge of shovels hit the ground to kick off the summer. But the rally lost momentum fast, as groundbreaking activity sank in July.
Total construction starts fell 10.2% in July to a seasonally adjusted rate of $1.19 trillion, according to Dodge Construction Network.
Nonresidential building starts, such as commercial and manufacturing projects, plummeted 30.1% in July. Nonbuilding activity, such as highways and bridges, provided the lone bright spot for the report, climbing 20.4%, according to the report. Residential activity also slipped 3.1%.
“Construction starts reversed course in July, offsetting the strong gains made in June,” said Eric Gaus, chief economist at Dodge Construction Network, in the release. “The latest data reinforced trends we have been watching since the beginning of the year.”
That trend refers, in part, to a recent manufacturing construction slump, said Gaus. Manufacturing construction starts are down 27.8% year over year, according to Dodge Construction Network.
Despite the slowdown, new investments indicate capital is making its way back to the U.S.
Apple announced earlier this month a $100 billion expansion to its American Manufacturing Program, bringing its total planned investment in the U.S. to $600 billion over four years. The effort, backed by the Trump administration, aims to reshore supply chains and incentivizes suppliers to follow suit.
On the other hand, data center construction continues to boom, said Gaus.
One in eight Associated Builders and Contractors members currently holds a data center contract. Notable strength in the sector also boosted overall construction planning numbers in July, said Sarah Martin, associate director of forecasting at Dodge.
Here are the eight largest U.S. projects to break ground in July, according to Dodge:
- The $3 billion Empire Wind offshore wind energy project in New York.
- The $1.8 billion A’s ballpark in Las Vegas.
- The $1.6 billion Boardman to Hemingway power transmission line in Boardman, Oregon.
- The $855 million UU West Valley Eccles health campus in West Valley City, Utah.
- The $650 million Mercy Hospital campus in Wentzville, Missouri.
- The $552 million Rangel Houses repair and renovation in New York City, New York.
- The $550 million Meta data center campus in Bowling Green, Ohio.
- The $365 million 20 Long Slip Apartment tower and pool in Jersey City, New Jersey.
Starts growth
Nonresidential construction bore the brunt of July’s decline, according to Dodge.
Starts in the category plunged over the month, particularly due to a 84.7% drop in manufacturing. That’s largely due to an exceptional surge in June, namely TSMC’s $10 billion Arizona chip plant.
Office starts also posted poor results, falling 33.1% in July to match 2024 levels, according to the report. Institutional projects overall, such as education and healthcare, also slipped 4.6%.
Nevertheless, nonresidential building starts still sit 4.3% compared to July 2024. Commercial and institutional work are up 5.5% and 3%, respectively.
Infrastructure activity, too, continues to post steady growth.
Nonbuilding starts improved 20.4%, buoyed by a 127.2% spike in utilities, according to Dodge. Highway and bridge work fell 2.5%, adding to a 17.7% drop in environmental public works.
Through July, nonbuilding activity is up 5.3% year to date.
Residential activity fell 3.1% in July as a result of a 9.5% drop in multifamily starts. Single-family building ticked up slightly 1.2% in July, though it remains 10.1% lower for the year. Overall, residential starts dropped 4.4% through July, according to Dodge.
