The latest data from the Dodge Construction Network (DCN) has revealed a 19% decline in the total number of construction starts for September, marking the second consecutive month in which declines were recorded following a 48% increase in July.

The new seasonally adjusted annual rate is now $1.02 trillion. The DCN reports that September’s figures were driven by a 23% drop in nonresidential construction starts, with additional residential and nonbuilding projects dipping by 11% and 25 %, respectively.

The DCN also notes that year-to-date, total construction was 16% higher in the first nine months of 2022 compared to the same period of 2021. Nonresidential starts rose 37% during that period, while residential starts stagnated and nonbuilding starts increased by 20%.

“September’s decline in construction starts should not be seen as a precursor to a cyclical pullback in the industry,” Richard Branch, chief economist for the Dodge Construction Network, said in a statement. “The previous two saw the start of several megaprojects, and the decline in September returns starts activity to its trend level. It is likely, however, that as interest rates move higher in the coming months, marginal construction projects may not get underway and construction activity will begin to settle back.”

Starts in the nonresidential sector were led by a $5.7 billion oil platforms project in the Gulf of Mexico and the $2.9 billion Metro-North Penn Station Access Project. The $1 billion AEG Nashville Yards project led the group of high-figure multifamily sector starts, followed by Behar Font & Partners’ $300 million Sterling Okan tower in Miami and the $250 million Majestic mixed-use development in Gowanus, Brooklyn. Overall multifamily starts were up 25%, while single-family is down by 9%, dating back to the first nine months of the year. 

The DCN also noted that September's construction starts fell in all five regions.