Construction Starts Show Modest Growth Amid Sector Variance

Washington, D.C., September 20, 2025

News Summary

Total construction starts increased by 1.7%, reaching $1.23 trillion, mainly driven by nonbuilding and multifamily residential activities. The nonresidential sector faced a decline, particularly in commercial starts, while the South Central region experienced significant growth. Mixed trends were observed in residential construction, highlighted by a rise in multifamily projects alongside a downturn in single-family starts. The overall landscape underscores a complex construction environment, necessitating strategic navigation by industry leaders.

Washington, D.C. – Total construction starts experienced a modest increase of 1.7% in August 2025, reaching a seasonally adjusted annual rate of $1.23 trillion. This rise is driven by significant activity in the nonbuilding and multifamily residential sectors, despite a decline in nonresidential building starts.

In August, nonresidential construction starts saw a decline of 5.4%, with overall nonbuilding construction starts growing robustly by 9.3%. Notably, residential construction starts improved by 2.4% during the same period. Throughout 2025, total construction starts are up 1.9% compared to the previous year, with nonresidential activity enjoying a 3.4% increase year-to-date. However, residential construction is facing challenges, showing a year-to-date decrease of 5.0%.

Key Highlights from August Construction Activity

Of particular interest, nonbuilding construction starts surged, primarily due to major infrastructure projects. For example, significant nonbuilding projects included:

• $5.1 billion Woodside Louisiana LNG Facility in Sulphur, Louisiana
• $2.9 billion Cheniere Corpus Christi LNG Facility in Gregory, Texas
• $1.8 billion Kingston Energy Complex with Battery Storage in Kingston, Tennessee

Conversely, nonresidential building starts fell to a seasonally adjusted rate of $431 billion in August, suffering from a 12.0% decrease in commercial starts. Among these, warehouse construction took the hardest hit, declining by 25.3%, along with retail stores falling by 11.3% month-over-month.

Sector Performance

While the commercial sector faced declines, institutional starts rose by 3.7%, benefiting from improvements in educational (up 0.5%) and healthcare facilities (up 2.8%) and other institutional categories rising by 9.9%.

Manufacturing activity has also been volatile; it dropped 24.4% in August following a previous month’s staggering drop of 84.8%. Despite these fluctuations, over the year, nonresidential starts showed resilience, with an overall increase of 4.8% in the 12 months ending August 2025.

Residential Construction Trends

Residential construction trends are mixed. The sector rose to an annual rate of $364 billion in August, with multifamily residential starts climbing 15.5%. However, single-family residential starts saw a decline and fell 5.4%. Year-to-date, single-family starts dropped by 11.7%, contrasting with an up trend in multifamily starts, which have increased by 9.9%.

Over the past year, total residential starts fell by 1.2%, with single-family starts down 5.9% and multifamily starts up 8.6%. Notable multifamily projects initiated in August included:

• $619 million Kuilei Place Mixed-Use Residential Tower in Honolulu, Hawaii
• $413 million 120 Brickell Residences in Miami, Florida
• $383 million Coles Street Mixed-Use Development in Jersey City, New Jersey

Regional Differences

Regionally, construction activity displayed a stark divergence in performance. Construction starts in the South Central region surged by 53%, while other regions experienced declines: Northeast (-25%), Midwest (-10%), South Atlantic (-2%), and the West (-12%).

Conclusion

As of August 2025, total construction starts reflect a complex landscape of rising nonbuilding and multifamily activity alongside declines in other sectors. This mix will require careful navigation by industry leaders as they plan for the coming months.

Frequently Asked Questions

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• Encyclopedia Britannica: Architecture
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