Construction Starts Rebound in May With 13% Monthly Increase, But Year-to-Date Figures Still Trail 2024

After a sluggish April, construction activity picked up in May, with total construction starts rising 13% to a seasonally adjusted annual rate of $1.16 trillion, according to new data from Dodge Construction Network. While the increase signals a welcome rebound across most sectors, the industry remains slightly behind 2024’s pace on a year-to-date basis.

“Construction starts rebounded across most sectors in May, bouncing back from a sluggish April,” said Sarah Martin, associate director of forecasting at Dodge Construction Network. “However, year-to-date figures remain below last year’s pace. Ongoing uncertainty around trade policy and the economic outlook is likely to keep construction activity in check in the months ahead.”

Sector-by-Sector Snapshot:

Nonbuilding Starts

‍Nonbuilding construction experienced the strongest growth in May, climbing 20% to an annual rate of $336 billion. Gains were seen in environmental public works (+9%), utility/gas (+102%), and miscellaneous nonbuilding projects (+37%). However, highway and bridge construction dropped 5% for the month.

On a year-to-date basis through May, nonbuilding starts are down 2%. Environmental public works starts declined 5%, and utilities fell 22%, though highway/bridge work is up 6%, and miscellaneous nonbuilding starts have surged 25%.

For the 12-month period ending May 2025, total nonbuilding starts fell 1%. Bright spots included environmental public works (+12%), highway and bridge starts (+8%), and miscellaneous nonbuilding (+24%), while utility/gas construction plunged 32%.

Notable May project starts in this category included:

• $1.5 billion Sierra Solar Farm and Storage (400 MW) in Fallon, Nevada
• $1.2 billion Delta Blues Advanced Power Station (754 MW) in Greenville, Mississippi
• $1.2 billion BART Train Control Modernization in Oakland, California

Nonresidential Starts

‍Nonresidential building starts increased 18% in May to a seasonally adjusted annual rate of $459 billion. Commercial starts rose 28%, spurred by gains in the office, warehouse, and retail segments. Institutional starts were up 19%, particularly in healthcare, while manufacturing starts declined 13%.

Year-to-date, nonresidential starts are down 6%. Commercial starts are 6% higher than last year, institutional starts are down 2%, and manufacturing starts have seen significant declines.

Over the 12-month period ending in May 2025, nonresidential starts increased by 2%. Commercial starts jumped 14%, institutional improved 8%, and manufacturing starts declined 41%.

Major projects that broke ground in May include:

• $900 million SpaceX Starship Starfactory GigaBay Facility in Brevard County, Florida
• $780 million UK CTC Markey Cancer Treatment and Surgery Center in Lexington, Kentucky
• $705 million DSHS Western State Forensic Hospital in Lakewood, Washington

Residential Starts

‍Residential construction starts saw modest growth in May, rising 2% to an annual rate of $368 billion. Multifamily starts led the way with a 15% increase, while single-family starts fell 5%.

Through May, residential starts are down 5% year-to-date, with single-family down 9% and multifamily up 5%. Over the 12 months ending in May, both single-family and multifamily activity remained flat compared to the prior year.

Top multifamily projects launched in May include:

• $720 million Pfizer HQ Residential Conversion in New York, NY
• $403 million Domino Sugar Residential Redevelopment (Site B) in Williamsburg, NY
• $290 million Monmouth Square Residential Development in Eatontown, NJ

Regional Trends

Geographically, construction starts in May increased in the Northeast, South Atlantic, South Central, and Western U.S., but declined in the Midwest—suggesting a geographically uneven rebound.

The 13% monthly jump reflects the sector's resilience and adaptability amid economic uncertainty and shifting policy conditions. Despite gains in solar and utility megaprojects, and robust demand for healthcare and commercial infrastructure, the industry still faces headwinds including material costs, labor shortages, and tighter financing conditions.

As Dodge’s Martin notes, even with month-over-month rebounds, macroeconomic concerns could continue to influence construction activity for the remainder of 2025. With that in mind, stakeholders across the industry are expected to remain cautious in planning and forecasting.

Originally reported by Dodge Construction Network.