Total U.S. construction starts increased 2.6% in December to a seasonally adjusted annual rate of $1.24 trillion, according to Dodge Construction Network, as strength in nonbuilding work and large-scale data center projects helped offset softer building activity.
For the full year, total construction starts climbed 5.4%. Nonresidential starts rose 4.5%, nonbuilding activity surged 18.7%, and residential starts declined 4.8% compared with 2024.
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“Nonbuilding construction, alongside data centers, was the primary engine of growth in 2025, supporting a 5.4% expansion in the total dollar-value of starts,” stated Sarah Martin, Associate Director of Forecasting at Dodge Construction Network. “In square footage terms, however, building starts declined 4.7% alongside weaker residential, manufacturing, and institutional activity.”
Residential building starts edged up 1.0% in December to a seasonally adjusted annual rate of $370 billion. Single-family construction declined 4.5% month over month, while multifamily starts jumped 10.2%.
Despite December’s increase, residential construction finished 2025 down 4.8%. Single-family starts dropped 13.2% for the year, while multifamily starts increased 13.1%, highlighting diverging market dynamics.
The largest multifamily projects to break ground in December included the $502 million Launiu Ward Village Condominiums in Honolulu, Hawaii; the $500 million Alloy Block Residential Tower Phase 2 in Boerum Hill, New York; and the $272 million SDSU Mission Valley Residential Building in San Diego, California.
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Nonresidential building starts fell 6.6% in December to a seasonally adjusted annual rate of $450 billion. However, commercial construction posted gains, rising 9.8% for the month.
Offices and data centers increased 7.4%, while parking garages surged 38.8%, hotels jumped 74.4%, and warehouses rose 0.7%. Retail construction declined 12.2%.
Institutional starts dropped 16.3%, driven by declines in education and miscellaneous institutional projects, although healthcare facility construction rose 7.9%. Manufacturing starts fell sharply, down 30.8% in December.
For 2025, nonresidential starts increased 4.5%, with commercial and industrial activity up 10.9%, while institutional construction declined 1.9%.
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Major nonresidential projects breaking ground in December included the $1 billion Google Data Center Phase 1 in West Memphis, Arkansas; the $750 million CyrusOne Data Center in Whitney, Texas; and the $714 million SNA Data Center Phase 2 in Cedar Rapids, Iowa.
Nonbuilding construction starts climbed 16.3% in December to a seasonally adjusted annual rate of $422 billion, providing the largest boost to overall construction activity.
Highways and bridges surged 85.2% month over month, while miscellaneous nonbuilding projects rose 35.9%. Environmental public works declined 26.9%, and electric power and utilities slipped 9.0%.
The largest nonbuilding projects to break ground included the $3.5 billion Port Authority Midtown Bus Terminal Phase 1 in New York City; the $1.6 billion Entergy Legend Power Station in Port Arthur, Texas; and the $1.5 billion LAX Airport Roadway Improvements project in Los Angeles.
Regionally, construction starts increased in the Northeast (+12.1%), South Central (+15.6%), and West (+6.9%) in December. Activity slowed in the South Atlantic (-2.9%) and Midwest (-19.0%).
Originally reported by Construction. Com.
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