New data from the Dodge Construction Network has construction starts falling 7% in October to a seasonally adjusted annual rate of $1.1 trillion. The figures follow September’s 6% decline and represent another 4% year-to-year decline when compared to the same data sets from October 2022. 

Nonbuilding and residential starts fell 32% and 1%, respectively. Nonresidential building starts gained 8% during the month. 

Nonresidential starts were also up 8% year-to-date, an adjusted annual rate of $490 billion, though Dodge notes the sector would have fallen 28% if not for an abnormally strong spate of manufacturing plants. Residential starts represented another $385 billion. Nonbuilding starts fell to $231 billion year-to-date through October; however, nonbuilding starts were up by 20% overall.

“Construction starts have weakened over the last two months as high interest rates and tight credit have restrained activity,” Richard Branch, the chief economist for the Dodge Construction Network, stated. “While it seems likely that the Federal Reserve will hold off raising rates further, it will take time until they consider easing. This will likely result in a continued softening in construction starts over the next several months.”

Starts in the nonbuilding sector were led by a $319 million bridge replacement project in the Boston area. The $364 million QPX mixed-use tower scheme in Long Island City, New York, led all projects in the multifamily category, while the nonresidential component was led by a $7.5 billion Micron semiconductor fabrication facility in Boise, Idaho, the $2.2 billion Hyundai/LG EV battery plant in Ellabell, Georgia, and the $1.5 billion Nucor Sheet Mill in Apple Grove, West Virginia. 

Regionally, starts fell in the Midwest, South Atlantic, South Central, and West regions and rose in the Northeast.