The latest data from the Dodge Construction Network has indicated a 6% total rise in construction starts to a seasonally-adjusted rate of $1.3 trillion for the month of August, following a 17% rise that was recorded in July thanks to gains in the multifamily and nonbuilding sectors.

Nonresidential starts for the month rose by 40% thanks to a 285% increase in the manufacturing sector. Residential and nonbuilding starts both fell by 1% and 14%, respectively, while starts in the commercial and nonresidential building sectors both rose by 8% and 24% each. 

“Despite the August gain, the construction sector is running uphill,” Dodge Construction Network chief economist Richard Branch said. “Fear of an imminent recession seems to have abated, which should provide a boost of confidence to the sector. However, higher interest rates, labor shortages and significantly tighter lending standards will weigh down starts in the final quarter of the year. This will persist for the foreseeable future, lasting until interest rates start to move lower.” 

Year-to-date through August 2023, total construction starts were 5% below the figures recorded for August 2022. Residential and nonresidential starts were down 18% and 9% each, with nonbuilding starts up 22%. For the 12 months ending August 2023, total construction remained flat. Nonbuilding starts were another 20% higher, and nonresidential building starts rose by a total of 6%. The DCN also noted that, on a 12-month rolling basis, residential starts showed a decline of 17% overall.

The manufacturing figures were propelled by two $2.5 billion and $2 billion projects outside of Raleigh, North Carolina. A $3.5 billion utilities project in the Four Corners region led all projects in the nonresidential sector, followed by a $2.9 billion infrastructure project in Port Sulphur, Louisiana. A $530 million mixed-use complex in Knoxville, Tennessee led the multifamily sector, followed closely by Skidmore, Owings and Merrill's $425 million 250 Water Street mixed-use tower in New York.

Regionally, total construction starts in August rose in the Midwest, South Atlantic, and West regions, while falling in the South Central region only.