Commercial construction activity made a comeback in May, with several large-scale projects breaking ground across the U.S., offering temporary relief for contractors after a slow April. According to Dodge Construction Network, total construction starts rose 13% for the month, driven by strong showings in the nonresidential and nonbuilding sectors.

“Construction starts rebounded across most sectors in May, bouncing back from a sluggish April,” said Sarah Martin, associate director of forecasting at Dodge. “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 for the months ahead.”

Nonresidential starts—including office, hotel, and healthcare facilities—surged 18% in May, while nonbuilding work like highways and utilities jumped 20%. Residential starts edged up 2%, lifted by a 15% increase in multifamily activity.

Largest Projects That Broke Ground in May 2025

1. Sierra Solar and Storage Project – $1.5 billion in Fallon, Nevada.
2. Delta Blues Advanced Power Station – $1.2 billion in Greenville, Mississippi.
3. BART Train Control Modernization – $1.2 billion in Oakland, California.
4. SpaceX Starship GigaBay – $900 million in Brevard County, Florida.
5. University of Kentucky CTC Markey Center – $780 million cancer treatment and ambulatory surgery center in Lexington, Kentucky.
6. Pfizer HQ Residential Conversion – $720 million in New York City.
7. Western State Forensic Hospital – $705 million in Lakewood, Washington.
8. Domino Sugar Redevelopment – $403 million residential project in Williamsburg, New York.
9. Monmouth Square Development – $290 million residential project in Eatontown, New Jersey.

Sector Insights

Nonbuilding construction reached a seasonally adjusted annual rate of $336 billion. While utility work surged 102% and environmental public works grew 9%, highway and bridge starts dropped 5% for the month. Year-to-date, however, utility work has declined 22% and environmental public works are down 5%, while highway and bridge activity remains up 6%.

Nonresidential starts rose to an annual rate of $459 billion, led by a 28% gain in commercial work. Retail, office, and warehouse sectors posted gains, and institutional starts grew 19%, mainly due to strong healthcare project activity. Manufacturing starts, however, declined 13% in May. Through May, commercial construction remains up 6% from 2024, though institutional building has dipped 2%.

Residential starts increased to a $368 billion annual pace, entirely driven by a 15% rise in multifamily activity. Single-family construction dropped 5%. Year-to-date, residential starts are down 5%, with single-family starts falling 9% and multifamily up 5%.

What’s Fueling Construction Starts in May?

• Solar and Clean Energy Projects: The $1.5B Sierra Solar project shows continued investment in renewables despite looming tariff concerns.
• Healthcare Expansion: The $780M cancer center in Kentucky is part of a broader trend in healthcare infrastructure investment.
• Adaptive Reuse: The $720M conversion of Pfizer's HQ into housing reflects urban developers responding to housing shortages through repurposing commercial space.

Challenges on the Horizon

‍Despite the May bounce, long-term projections remain cautious.

• “Trade policy and economic outlook remain the biggest wildcards,” Martin said.
• Tariff uncertainty, interest rate pressure, and manufacturing pullbacks could slow second-half 2025 growth.
• Developers are also closely watching federal tax credit changes and local permitting bottlenecks.

Takeaway for Contractors

‍While the top projects of May offer optimism, contractors are advised to remain cautious in forecasting workloads. Diversification into sectors like healthcare and public infrastructure may offer more resilience amid potential headwinds.

Originally reported by Sebastian Obando in Construction Dive.