More shovels hit the ground in June but clouds still hang over the long-term outlook in the construction industry.
Total construction starts surged 16% in June to a seasonally adjusted annual rate of $1.33 trillion, according to Dodge Construction Network.
Nonresidential building activity jumped 39% for the month, led by a wave of manufacturing and data center groundbreakings. Nonbuilding starts, including highways, bridges and utilities, ticked up 2%, though residential starts edged down 1%, according to the data.
That bounceback marks a welcome return to growth after a slow spring.
However, inflationary pressure, fueled in part by the Trump administration’s evolving trade policy, still weighs heavily on the construction industry. At the same time, doubts about when interest rates will fall have made developers more cautious to launch new work.
That continues to add a degree of strain on building activity, said Sarah Martin, associate director of forecasting at Dodge Construction Network, in the release.
“Construction starts saw solid growth in June,” said Martin. “However risks remain elevated that construction starts will be more subdued in the back half of the year, alongside ongoing uncertainty over trade policy and the broader economy.”
Here are the nine largest U.S. projects to break ground in June, according to Dodge:
- Phase 3, Fab 3 of the $10 billion Taiwan Semiconductor factory in Phoenix.
- The $2.25 billion Eli Lilly medicine foundry in Lebanon, Indiana.
- The $2 billion Phase 1 of the SNA data center in Cedar Rapids, Iowa.
- The $1.6 billion Amtrak East River Tunnel rehabilitation in Long Island, New York.
- The $1.1 billion I-35 CapEx-C Tunnel and Pump Station in Austin, Texas.
- The $975 million Montgomery Locks and Dam project in Monaca, Pennsylvania.
- The $518 million Court Square mixed-use tower and garage in Long Island City, New York.
- The $391 million Eastchester Gardens Apartments in Laconia, New York.
- The $264 million Residences at Shell Bay Condos in Hallandale Beach, Florida.
Starts growth
June’s standout gains came from the nonresidential sector, according to Dodge.
Starts in the category climbed to an annualized rate of $635 billion, a 39% spike over May. Within nonresidential, commercial starts soared 78% over the month, and manufacturing construction kickoffs skyrocketed 304% largely due to TSMC’s $10 billion Arizona chip plant. Institutional starts posted roughly no change, as a 26% increase in education work balanced a 20% drop in healthcare projects.
Year-to-date, nonresidential building starts increased 6% compared to the same period last year. Commercial and institutional activity ticked up 9% and 3%, respectively, according to Dodge.
Infrastructure activity helped push nonbuilding starts up 2% in June to a seasonally adjusted annual rate of $330 billion. For example, highway and bridge projects jumped 32%, and environmental public works gained 32% after a slow May, according to the data. On the other hand, construction on utilities dropped 29%, offsetting some of the month’s progress.
Year-to-date, nonbuilding starts sit 1% higher than last year’s pace, supported by 8% growth in road and bridge work. Meanwhile, utility groundbreakings remain down 15% this year.
Housing construction dipped in June, with residential starts slipping 1% to a seasonally adjusted annual rate of $366 billion. Single-family starts dropped 2%, while multifamily groundbreakings remained flat.
So far this year, total residential starts decreased 5% from the same point in 2024. Single-family activity has dropped 11%, while multifamily is up 8%.
