According to a new Dodge Construction Network report, total construction starts rose 8% in October to a seasonally adjusted annual rate of $1.12 trillion. This is a rebound following two consecutive months of decline. Last month, nonresidential building starts gained 9% and nonbuilding starts jumped 26%, while residential starts fell by 3%. 

Year-to-date, total construction was 16% higher through October 2022 compared to the same period in 2021. Nonresidential building starts rose 37% over the year, residential starts remained the same, and nonbuilding were up 17%. 

“October’s gain in construction starts is a further sign that the construction sector continues to weather the storm of higher interest rates,” said Dodge Construction Network chief economist Richard Branch. “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.”

The nonbuilding construction sector was led by two $500 million plus Interstate Highway projects in Texas. The largest nonresidential building projects to break ground in October were the $3.2 billion Texas Industries chip fabrication plant in Sherman, Texas and the $2 billion General Motors Orion EV plan in Orion Township, Michigan. In the residential building sector, single-family starts fell 3%, and multifamily starts dropped 4%. The largest multifamily projects to break ground last month were the $564 million Long Island City Center II in Long Island City, New York, and the $450 million Waldorf Astoria residences and hotel in Miami. 

Total construction starts in October rose in the Midwest and South Atlantic regions and fell in the South Central and West.