Total construction starts rose +8% in October to a seasonally adjusted annual rate of $1.12 trillion, according to Dodge Construction Network. In October, nonresidential building starts gained +9%, and residential starts fell by -3%.
Year-to-date, total construction was +16% higher in the first ten months of 2022 compared to the same period of 2021. Nonresidential building starts rose +37% over the year and residential starts remained flat.
“October’s gain in construction starts is a further sign that the construction sector continues to weather the storm of higher interest rates,” said Richard Branch, chief economist for Dodge Construction Network, in the press release. “While the residential sector is feeling the pain, the nonresidential building and infrastructure sectors are hitting their stride. 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.”
Nonresidential building starts rose +9% in October to a seasonally adjusted annual rate of $480.5 billion. During the month, commercial starts rose +19%, led by office and hotel projects. Institutional starts rose +8% due to a surge in education projects, while manufacturing starts fell by -5%. Through the first ten months of 2022, nonresidential building starts were +37% higher than the first ten months of 2021. Commercial starts grew +23%, and institutional starts rose +21%. Manufacturing starts were +157% higher on a year-to-date basis.
The largest nonresidential building projects to break ground in October was the $3.2 billion Texas Industries chip fabrication plant (building 1) in Sherman, TX. Check out the chart on page 2 to see some of the other billion-dollar construction projects now underway or on the drawing boards.
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