According to a new Dodge Construction Network report, total construction starts jumped 27% in December to a seasonally adjusted annual rate of $1.185 trillion. This figure is a rebound from a dip in November, which saw an 18% decline. Throughout December, nonresidential building starts increased by 51%, nonbuilding starts increased by 30%, and residential starts rose by less than one percent. 

Total construction starts last year were 15% higher than in 2021. Nonresidential building starts rose 38% over the year, nonbuilding starts increased 19%, while residential starts were down 3%.

“December starts revealed where the current strength in the construction lies: manufacturing and infrastructure,” said Dodge Construction Network chief economist Richard Branch. “It is those segments that will provide insulation for the sector as the economy softens in 2023. Recession or not, higher interest rates will weigh on the economy and restrain construction starts in 2023. However, it’s encouraging to know that the new year is starting with a great deal of positive momentum.”

The main driver behind the boost in nonbuilding construction starts last month was the utility/gas category, with the start of the $2.2 billion Champlain Hudson Power Express transmission line in New York State. Starts activity in all nonbuilding sectors increased in 2022, also led by utility/gas plants, which rose by 26%. This was followed by gains in highway and bridge starts, environmental public works, and miscellaneous nonbuilding starts. 

In the nonresidential sector, manufacturing starts rose by a whopping 596% from November to December. Institutional starts also rose, while commercial starts fell due to a pullback in office and hotel starts. Over the year, manufacturing construction activity led all gains, rising 185%. The largest nonresidential building projects to break ground in December were the $8.5 billion Golden Triangle Ethylene Cracker in Orange, Texas, and the $2 billion AltAir/World Energy renewable fuels facility in Paramount, California. 

In December, single-family starts fell by 5%, with multifamily starts gaining 8%. When compared to 2021, residential starts were 3% lower in 2022. The largest multifamily projects to break ground last month were the $350 million first phase of the Hamilton Green complex in White Plains, New York, and a $240 million mixed-use project in Brooklyn. 

Regionally, total construction starts in December rose across all five regions.