Construction crews had no shortage of groundbreaking work in May, especially for those on infrastructure sites.
Total starts jumped 34.1% month over month in May to a seasonally adjusted annual rate of $1.78 trillion, according to Dodge Construction Network. The growth stemmed largely from the key sectors that have fueled activity in recent months, said Sarah Martin, director of economic research at Dodge Construction Network.
In other words, construction activities are still heavily focused on particular categories that have continued to see high demand. That means, on the flip side, contractors with work outside of those trendy sectors continue to see a market with far fewer groundbreakings.
“Megaprojects starts within healthcare, manufacturing, utilities and data centers drove sizable gains across the month,” said Martin in the release. “Outside of this activity, however, pockets of weakness across institutional construction, warehouses and residential construction remain.”
Nonresidential building starts increased 17.8% month over month in May. Manufacturing construction rebounded 116.1% during that span, predominantly due to a $5 billion Rivian electric vehicle plant groundbreaking in Georgia, according to Dodge. Institutional construction, which comprises both education and healthcare, also jumped 17.4% month over month in May off the back of a massive 138.8% increase in healthcare construction groundbreakings.
Commercial construction, however, remained essentially flat, propped up by a 20% month-over-month gain in May in the office and data center category. Other commercial sectors notably dropped during the month, including a 36.8% and 17% month over month decreases in hotel and warehouse construction, respectively.
On a year-to-date basis through May, total nonresidential starts improved 12.3%, led by a 32.9% growth in commercial groundbreakings. Institutional starts are down 8.8% over the same period, according to Dodge.
Nonbuilding construction posted the month’s strongest gains, up 91.9% month over month in May, according to Dodge. Highway and bridge starts skyrocketed 111.3% from the month prior, as well as a massive 195.6% monthly jump in utility groundbreakings, according to Dodge.
On a year-to-date basis through May, nonbuilding construction increased 32.9% alongside the 125.9% year-to-date increase in electric power and utility work. Highway and bridge work, meanwhile, improved 12.1% year-to-date through May, according to Dodge.
Residential construction moved in the opposite direction, falling 2.1% month over month in May, according to the report. Both single family and multifamily starts ticked down 1% and 3.7% month over month, respectively.
The largest projects to break ground in May included, according to Dodge:
- The $13.5 billion LNG export facility in Hackberry, Louisiana.
- The $5 billion Rivian electric vehicle plant in Social Circle, Georgia.
- The $4.2 billion SR 400 Express Toll Lanes phase 3 project in Sandy Springs, Georgia.
- The $4.1 billion Brent Spence Bridge corridor project in Covington, Kentucky.
- The $3 billion Nebius data center buildings 1 and 2 project in Birmingham, Alabama.
- The $2.8 billion World Trade Center commercial tower project in New York City.
- The $867 million 111 Wall Street residential conversion project in New York City.
- The $633 million River’s Edge Continuing Care Retirement Community phase 1 project in New York City.
- The $271 million Cherry Lane Residential Tower phase 1 project in Denver.
