U.S. construction activity rebounded in March, driven largely by a handful of major power and utilities projects that offset weakness in other sectors, according to new data from Dodge Construction Network.
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Total construction starts rose 12.8% month over month to a seasonally adjusted annual rate of $1.22 trillion, reversing a 13.2% decline recorded in February. The increase was fueled by a sharp surge in nonbuilding activity, particularly within the electric power and utilities segment.
Starts in that category jumped 353.6% from the previous month, helping push overall nonbuilding construction up 37.9% in March.
“A few strong categories overcame slight weakness in all the others in March,” said Eric Gaus. The rebound marked what analysts described as a continuation of a volatile, “flip-flopping” trend in monthly construction activity.
As seen earlier in 2026, large-scale infrastructure and energy projects played an outsized role in boosting overall construction figures. Several multibillion-dollar developments broke ground in March, significantly lifting the nonbuilding sector.
However, not all infrastructure segments performed equally. Highway and bridge starts fell 13.6% month over month, while environmental public works declined 4.1%, reversing gains seen in February.
On a longer-term basis, total nonbuilding starts increased 15.8% for the 12 months ending in March 2026. Within that category, utility and gas projects surged 52.3% year over year, highlighting sustained investment in energy infrastructure.
Nonresidential construction starts rose 6.3% in March, supported by a 251.9% spike in manufacturing activity following a weak February. Hotel and retail construction also posted gains, increasing 19.3% and 5.6%, respectively.
Institutional construction, however, dipped 1.5% overall, even as healthcare and education projects posted modest increases of 9.7% and 3.4%.
The commercial sector showed signs of cooling, declining 9.2% month over month. The drop was driven in part by a 16% decrease in office and data center starts, following a sharp 159.6% surge in February.
Over a 12-month period, total nonresidential starts rose 6.5%, with commercial and manufacturing segments increasing 19.2% and 20.2%, respectively. Institutional construction declined 5.7% over the same timeframe.
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“The commercial segment shows the most strength with 12 month growth for all sub-categories except warehousing,” Gaus said.
Residential construction showed modest gains in March, rising 2.6% month over month. Multifamily starts climbed 15.3%, while single-family construction dropped 5.3%. On an annual basis, residential starts declined 5.3%, driven by a 15.7% decrease in single-family housing, despite a 16.3% increase in multifamily development.
Among the largest projects to break ground in March were several multibillion-dollar developments, including the $3.4 billion Shintech Ethylene project in Louisiana, the $2.5 billion Darden Clean Energy project in California and the $2.4 billion Savannah River plutonium processing facility in South Carolina. Additional major projects included two $2 billion energy developments in Texas and large-scale residential and infrastructure projects across the country.
The March data underscores the growing influence of megaprojects on overall construction activity, with a small number of large developments continuing to drive fluctuations in monthly performance.
Originally reported by Joe Bousquin, Senior Editor in Construction Dive.
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