Total construction starts fell 9% in August to a seasonally adjusted annual rate of $1.25 trillion, according to Dodge Construction Network. The decline, however, comes on the heels of a massive increase in July that saw the start of three large manufacturing plants and two LNG export facilities. In August, nonresidential building starts rose 7%, residential starts were 1% higher, while nonbuilding starts lost 36%.

Year-to-date, total construction was 16% higher in the first eight months of 2022 compared to the same period of 2021. Nonresidential building starts rose 35% over the year, residential starts were 1% higher, and nonbuilding starts were up 21%.

For the 12 months ending August 2022, total construction starts were 15% above the 12 months ending August 2021. Nonresidential starts were 33% higher, residential starts gained 4%, and nonbuilding starts were up 15%.

“While construction starts activity continues to be dominated by mega-projects like chip fabrication plants, the middle and lower end of the value spectrum is holding up well,” said Richard Branch, chief economist for Dodge Construction Network. “This is a sign that organic growth in the construction sector has not yet been undermined by the concern of a potential recession in 2023. While higher interest rates may undo this support in the coming months, the industry is in a very good position to continue modest growth.”

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