Gains in education and highway projects helped cushion a further decline in total construction groundbreakings in September.
Total construction starts dropped 1.5% month over month in September to a seasonally adjusted annual rate of $1.33 trillion, according to a Wednesday report from Dodge Construction Network. The decrease follows a sharp 24.8% month-over-month pullback in August, caused by a megaproject slowdown.
Nonresidential starts fell 6.3% month over month in September, driven by an 18.4% drop in commercial construction. Institutional starts, on the other hand, climbed 16.3% month over month, according to the report.
“Construction starts edged lower in September, but gains in institutional and nonbuilding construction helped cushion the decline,” said Sarah Martin, director of economic research at Dodge Construction Network, in the report. “These sectors provided a counterweight to weaker commercial and single-family starts.”
Despite that weakness, total groundbreakings sit well ahead of last year’s pace, according to Dodge.
For example, total starts increased 14.3% through the first nine months of 2026 compared with the same period last year. During that span, nonresidential and nonbuilding starts improved 23.7% and 18.4%, respectively.
Commercial construction, which include retail and warehouse, posted some of the steepest monthly drops in the latest report. Hotel groundbreakings tumbled 46.3% following a strong August, and manufacturing starts also fell 21% month over month, according to Dodge.
Institutional construction, such as education and healthcare, performed much stronger in September, up 16.3% month over month in September. Education starts accounted for much of that boost, up 38.4%.
Nonbuilding work also improved, particularly around highway and bridge groundbreakings. Those project starts improved 20.8% month over month in September, according to Dodge. Other work, such as utility projects, slipped 4.1% month over month.
Residential construction posted a modest decline, down 0.3% month over month in September. On a year-to-date basis, residential construction starts dropped 1.7% in September, according to the report.
Per Dodge, the largest projects to break ground in September included:
- The $4.6 billion South Valley data center in Silver Springs, Nevada.
- The $4.3 billion Beacon Point data center in Robstown, Texas.
- The $2 billion Vantage V41 data center campus in Fredericksburg, Virginia.
- The $1.7 billion Big Rooter Power Solar project in Bremond, Texas.
- The $1.6 billion Entergy Cypress Solar project in Redfield, Arkansas.
- The $1.2 billion Southwest Inertie North power lines project in Jerome, Nevada.
- The $820 million Four Seasons condominium tower in Austin, Texas.
- The $544 million One Montague Place Mixed Residential & Commercial Tower in Brooklyn Heights, New York.
- The $329 million Ombelle Mixed Use Residential Tower in Fort Lauderdale, Florida.
