Construction starts for the month of September declined a total of 6% to a seasonally adjusted annual rate of $1.2 trillion, according to the latest Dodge Construction Network report.

The findings come on the heels of a converse 6% increase reported in last month’s index that was driven primarily by the strong performance of the manufacturing sector. Nonresidential starts lost 4% for September, while residential starts declined 6%, and nonbuilding starts fell by 9%. 

“Risks continue to mount for the construction sector,” Richard Branch, the chief economist for the Dodge Construction Network, said. “Over the last 12 months, construction starts have essentially froze as rates increased and credit tightened. The industry needs further adjusting as rates are expected to stay higher for longer, along with the potential for higher energy costs and continued political uncertainty. A return to broad-based growth in construction starts is still some time away.”

Year-to-date through the end of September, total construction starts were 3% below that of the same period in 2022. Nonbuilding starts were 22% higher, while nonresidential building starts gained 3%. Residential starts posted a 16% decline in the same time period, with single-family and multifamily starts down another 22% and 5%, respectively, during the 12-month span.

The largest multifamily project to break ground for the month was the $385 million first phase of the South Pier Residential Towers in Tempe, Arizona. Nonresidential starts were led by a $2.5 billion Hyundai/SK EV battery plant in Cartersville, Georgia. The largest nonbuilding start was the $4.5 billion SunZia transmission line between Arizona and New Mexico, which is being led by the U.S. Department of the Interior. 

Regionally, total construction starts in September fell in the Northeast, Midwest, South Atlantic and West regions, while only a modest gain was recorded for South Central.