The construction sector should begin to feel relief now that the Federal Reserve has begun to lower rates, said Richard Branch, chief economist of Dodge Construction Network.
Total construction starts jumped 6% in August to a seasonally adjusted annual rate of $1.2 trillion, according to Dodge. That positive momentum should continue to move forward at a modest pace, especially around the first quarter of 2025, said Branch.
“The Dodge Momentum Index has been steady, indicating that owners and developers feel reasonably confident that market and financial conditions will improve,” said Branch. “Improve they will, but it will take successive rate cuts before they feel comfortable moving these projects forward to start.”
Here are the top nine U.S. projects to break ground in August:
- The $2.9 billion terminal 3 modernization at the San Francisco International Airport in San Francisco.
- The $1.3 billion Marshall County EV plant in Byhalia, Mississippi.
- The $900 million Geisinger Wyoming Valley Hospital in Wilkes-Barre, Pennsylvania.
- The $861 million South Brooklyn Terminal for offshore wind production in Sunset Park, New York.
- The $813 million second phase of the Bellefield Solar farm in California City, California.
- An unnamed $631 million paving project in Honolulu, Hawaii.
- The $332 million West Brighton I & II Apartments in Richmond County, New York.
- The $248 million The Downs mixed-use building in Northville, Michigan.
- The $235 million Cooper Park Commons in East Williamsburg, New York.
Starts’ YTD growth
Total construction starts jumped 4% in the first eight months of the year compared to the same period in 2023, according to Dodge.
Nonresidential starts posted a 3% increase, while residential groundbreakings gained 8%. Nonbuilding starts, such as highways, bridges and utility plants, dropped 1% through the first eight months compared to last year.
On a monthly basis, nonresidential construction starts ticked down 2% in August, largely due to a 21% drop in manufacturing starts and a greater 32% drop in overall commercial starts, which includes office, retail, warehouse and hotels, according to the report. Those declines were almost offset by a 32% gain in institutional starts, driven by education buildings and airline terminals.
Nonbuilding construction increased 17% in August, primarily due to a 57% jump in utility and gas plant projects. Residential starts improved 5% in August due to growth in both multifamily and single-family groundbreakings, according to Dodge.