The total number of construction starts fell by 19% in June, which resulted in a seasonally adjusted annual rate of $1.0 trillion, according to Dodge Construction Network’s latest Construction Starts Index. 

Nonbuilding starts dipped 46%, and nonresidential starts decreased by 13%. Residential starts, on the other hand, rose 9%. On a year-to-date basis through June, total construction starts were up 7% from the same period in 2023. Residential starts were up 14%, nonbuilding starts gained 8%, and nonresidential building starts rose 1%. 

June’s decline is attributed to a stark dip in utility/gas starts following a high level of activity in May, in which a Liquified Natural Gas plant and an offshore wind project got underway. As a result, gas/utility plants fell 90% over the month.

“The construction market remains sluggish as high interest rates continue to reverberate through the sector,” said Dodge Construction Network Chief Economist Richard Branch. “However, the Dodge Momentum Index, which tracks nonresidential building projects entering the planning phase, has been reasonably steady over the last year indicating that owners and developers remain cautiously optimistic that the conditions will be more conducive to construction in the future. But moribund starts activity means that these projects are piling up like water behind a dam. Lower rates in 2024 will allow these projects to start flowing again, resulting in a quicker pace of activity towards year-end.”

The largest nonbuilding project to break ground in June was the $510 million Airo Ivy City Yard rail improvements in Washington, D.C. The largest in the nonresidential building category was the $1.5 billion QTS Albany 1 & 2 data centers in New Albany, Ohio, while the residential sector was led by the $1 billion Bentley Residences in Sunny Isles Beach, Florida. 

Regionally, total construction starts in June fell in all regions.