A mixed month of momentum defined U.S. construction in July 2025. While eight mega-projects broke ground, the broader industry saw a significant dip in activity compared to June.

According to Dodge Construction Network, total construction starts fell 10.2% in July, bringing the seasonally adjusted annual rate to $1.19 trillion. The sharpest slowdown came in nonresidential building, which dropped 30.1%, while residential starts slipped 3.1%. By contrast, nonbuilding projects such as highways and energy infrastructure climbed 20.4%, helping cushion the downturn.

“Construction starts reversed course in July, offsetting the strong gains made in June,” said Eric Gaus, chief economist at Dodge Construction Network. “The latest data reinforced trends we have been watching since the beginning of the year.”

One of those key trends is the ongoing slump in manufacturing projects, which fell 27.8% year-over-year. The slowdown reflects a cooldown from June’s unusually high numbers, driven in part by Taiwan Semiconductor Manufacturing Co.’s $10 billion chip plant in Arizona.

At the same time, bright spots remain. Data center construction continues to surge, bolstered by demand from cloud providers and AI computing. “One in eight Associated Builders and Contractors members currently holds a data center contract,” said Sarah Martin, associate director of forecasting at Dodge. She added that this strength helped keep overall planning figures resilient in July.

Meanwhile, Apple announced a $100 billion expansion to its American Manufacturing Program, part of a broader $600 billion four-year investment push aimed at reshoring supply chains. The initiative, backed by the Trump administration, could help offset manufacturing softness in future months.

The Eight Largest U.S. Project Starts in July 2025

1. Empire Wind Offshore Energy Project, New York – $3 billion
2. Las Vegas A’s Ballpark, Nevada – $1.8 billion
3. Boardman to Hemingway Power Transmission Line, Oregon – $1.6 billion
4. UU West Valley Eccles Health Campus, Utah – $855 million
5. Mercy Hospital Campus, Missouri – $650 million
6. Rangel Houses Renovation, New York City – $552 million
7. Meta Data Center Campus, Ohio – $550 million
8. 20 Long Slip Apartment Tower, Jersey City, New Jersey – $365 million

Sector-by-Sector Trends

Nonresidential Construction‍

Down sharply in July, largely due to a collapse in manufacturing starts (-84.7%). Office projects also fell 33.1%, bringing activity closer to 2024 levels. Institutional work, including education and healthcare, declined 4.6%. Still, the sector remains 4.3% higher than July 2024, with commercial and institutional activity up 5.5% and 3% respectively.

Infrastructure (Nonbuilding)‍

Up 20.4% in July, thanks to a 127.2% spike in utilities. However, highway and bridge work dipped 2.5%, adding to a 17.7% decline in environmental public works. Year-to-date, nonbuilding activity is still up 5.3%.

Residential Construction‍

Fell 3.1% in July. Multifamily starts dropped 9.5%, while single-family ticked up 1.2%. For 2025 to date, residential activity is down 4.4% overall, with single-family homes 10.1% lower than last year.

Outlook

The July slowdown underscores the uneven nature of today’s construction market. While mega-projects in energy, healthcare, and technology continue to fuel regional growth, the manufacturing pullback and residential softness are weighing on national totals.

“The latest data show how reliant the industry is on a handful of sectors to maintain momentum,” said Gaus. “Manufacturing weakness is clearly a drag, but infrastructure and data centers are providing vital balance.”

As reshoring incentives take effect and federal funding for infrastructure continues to flow, industry leaders expect to see a rebound in late 2025 and into 2026.

Originally reported by Sebastian Obando in Construction Dive.