January Construction Starts Drop -6% to $1.1 Trillion According to Dodge Construction

Total construction starts fell -6% in January  from Dec. 2024 to a seasonally adjusted annual rate of $1.1 trillion, according to Dodge Construction Network. In January, nonresidential building starts receded -18%, residential starts decreased -1%, while nonbuilding starts moved +4% higher.
On a YOY basis, total construction starts were down -6% from Jan. 2024. Nonresidential starts were down -22%, residential starts were down -2% and nonbuilding starts were up +17% over the same period. 

For the 12 months ending Jan. 2025, total construction starts were up +4% from the 12 months ending Jan. 2024. Residential starts were up +5%, nonresidential starts were flat, and nonbuilding starts rose +7% over the same period.  

“After robust data center starts in November and December, total office starts fell back in January to more historically typical levels and drove a sizable piece of the month-to-month decline,” said Sarah Martin, associate director of forecasting at Dodge Construction Network, in the press release. “However, most nonresidential sectors saw weakness over the month. Ongoing labor shortages and high material costs will continue to pose risks to the sector, along with concerns over tariffs and stricter immigration enforcement. Projects are likely to continue moving through the planning queue slowly, until the Federal Reserve resumes cutting rates in the back half of the year.” 

Nonresidential

Nonresidential building starts receded -18% in January to a seasonally adjusted annual rate of $393 billion. Commercial starts were -41% lower in January, alongside weak office and hotel starts. Institutional starts, on the other hand, were up +4% in January following growth in healthcare and recreational projects. Manufacturing starts fell -16% over the month. On a year-over-year basis, nonresidential starts are down -22% compared to Jan. 2024. Commercial starts are down -18% and institutional starts are down 1% over the same period.

 
For the 12 months ending January 2025, total nonresidential starts were flat compared to the 12 months ending Jan. 2024. Commercial starts were up +7%, institutional starts improved +13% and manufacturing starts were down -45% over the same period.  The largest nonresidential building projects to break ground in January were the $5-billion Children’s Health & UTSW New Pediatric Campus in Dallas, TX; the $333-million Mid-Hudson Forensic Psychiatric Hospital in New Hampton, NY;  and the $307-million Timber Mill High School and Athletic Field in Conroe, TX.

Residential

Residential building starts fell -1% in January to a seasonally adjusted annual rate of $407 billion. Single-family starts fell -2%, while multi-family starts improved +2%. On a YOY basis, residential starts are down -2% compared to Jan. 2024, with single–family starts up +6% and multi-family starts down -15%. For the 12 months ending Jan. 2025, total residential starts were up +5%, while single-family starts were up +14%, and multi-family starts were down -10% compared to the 12 months ending Jan. 2024.  
The largest multi-family structures to break ground in January were the $470-million Ulana Ward Village Tower Building in Honolulu, HI; the $400-million JEM residences at Miami World Center in Miami, FL; and the $279-million Alafia Affordable Apartments in Spring Creek, NY.

Nonbuilding

Nonbuilding construction improved +4% in January to a seasonally adjusted annual rate of $337 billion. For the 12 months ending Jan. 2025, total nonbuilding starts were up +7%. Miscellaneous nonbuilding starts led the way, improving +26% compared to the 12 months ending Jan. 2024.  The largest nonbuilding projects to break ground in January were the $1.1-billion Sequoia Solar Farm (815 MW) in Callahan County, Texas; the $696-million NHHIP Segment 3B-2 road widening project in Houston, TX; and phase two of the Beaver Stadium renovations, valued at $630 million, in University Park, PA.