U.S. construction activity lost momentum in February as the absence of large-scale energy projects led to a sharp decline in overall starts, according to new data from Dodge Construction Network.
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Total construction starts dropped 13.2% month over month to a seasonally adjusted annual rate of $1.08 trillion. The decline follows a strong January driven by several multibillion-dollar energy and infrastructure megaprojects that temporarily boosted activity levels.
The February pullback was largely attributed to a steep drop in nonbuilding construction, which includes power, utility and infrastructure work. That segment fell 49.4% month to month, reversing a 24.3% surge recorded in January.
Electric power and utility construction experienced the most dramatic swing, plunging 90.1% after nearly tripling the previous month. January’s surge had been fueled by major developments such as a $12 billion LNG facility in Port Arthur, Texas, and a $6 billion energy campus in Homer City, Pennsylvania.
Without comparable megaprojects breaking ground in February, overall construction activity normalized sharply.
Despite the monthly drop, the longer-term trend for nonbuilding work remains positive. Over the 12 months ending in February 2026, total nonbuilding starts were still up 17%, highlighting continued investment in infrastructure and energy systems.
While megaprojects faded, several construction segments demonstrated resilience. Nonresidential building starts climbed 17.8% in February, while residential construction increased 8.3%.
“After a weak start to the year, nonresidential and residential building starts steadily rebounded throughout February,” said Sarah Martin, associate director of forecast at Dodge Construction Network. “Conversely, nonbuilding activity slowed down last month — normalizing from elevated levels in January.”
Commercial construction posted particularly strong gains, rising 48.5% month over month. This growth was largely driven by a 159.6% spike in office and data center developments, signaling continued demand for digital infrastructure.
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Among the largest projects breaking ground during the month were two major data center developments, each valued at $3 billion, alongside airport, infrastructure and residential renovation projects across multiple states.
However, not all sectors shared in the rebound. Warehouse, hotel, retail and parking construction all declined, while healthcare construction dropped 46.6%. Manufacturing construction also saw a sharp contraction, falling 54.1% month to month, reflecting ongoing volatility in that segment.
Residential growth was led by multifamily construction, which rose 15.9%, while single-family starts posted a more modest 4% increase. Still, over a 12-month period, total residential starts remain down 6.3%, indicating persistent pressure in the housing market.
Originally reported by Sebastian Obando, Reporter in Construction Dive.
