Construction starts for the month of November fell by 15% to new ten-month lows at a seasonally adjusted annual rate of $927 billion, according to the latest figures from the Dodge Construction Network. 

For the month, nonresidential building starts fell 29%, residential starts lost 6%, and nonbuilding starts dropped 2%. In terms of year-to-date figures through November 2023, total construction starts were down by 4% when compared to the same period last year. Residential and nonresidential starts were also down 14% and 7%, respectively, with nonbuilding starts recorded to be up by 19%. 

“Construction starts are deeply feeling the impact of higher rates,” Richard Branch, the chief economist for the Dodge Construction Network, said in a statement. “While the Federal Reserve seems poised to start cutting rates in the New Year, the impact on starts will lag. As a result, starts are expected to be weak through the mid-point of 2024 before growth resumes.”

Decreases in the nonresidential sector were driven largely by a 74% decline in manufacturing starts. Commercial starts fell by another 19%, and healthcare projects drove starts in the institutional sector up by 7%. The residential sector numbers were depressed largely by a 19% drop in multifamily starts despite a 1% gain in single-family construction. Nonbuilding figures were saved somewhat by the 17% rise in utility and gas starts.

The largest projects to break ground in November were the $1.9 billion Children’s Hospital of Philadelphia Inpatient Tower in Pennsylvania in the nonresidential sector, the $1.6 billion LG Energy Battery Plant in Queen Creek, Arizona, and the $834 million I-405 Brickyard to SR 527 improvements in Bothell, Washington (nonbuilding sector).

Regionally, total construction starts in November fell in the Midwest, South Atlantic, South Central, and West regions while rising in the Northeast.