Total Construction Starts Increase in May
Total construction starts rose 4 percent in May to a seasonally adjusted annual rate of $979.5 billion, according to Dodge Construction Network. Nonresidential building starts rose 20 percent.
Year-to-date, total construction was 6 percent higher in the first five months of 2022 compared to the same period of 2021. Nonresidential building starts rose 17 percent. For the 12 months ending May 2022, total construction starts were 10 percent above the 12 months ending May 2021. Nonresidential starts were 20 percent higher.
“The construction sector has become increasingly bifurcated over the past several months,” says Richard Branch, chief economist for Dodge Construction Network. “Nonresidential building construction is clearly trending higher with broad-based resilience across the commercial, institutional and manufacturing spaces. … . While the overall trend in construction starts is positive, the very aggressive stance taken by the Federal Reserve to combat inflation risks slowing the momentum in construction.”
Regionally, total construction starts in May rose in the Northeast, Midwest and South Central regions, but fell in the South Atlantic and West.
Nonresidential building starts rose 20 percent in May to a seasonally adjusted annual rate of $355.1 billion. In May, commercial starts rose 35 percent due to a large gain in office starts. Institutional starts rose 9 percent and manufacturing starts fell 5%. Through the first five months of 2022, nonresidential building starts were 17% higher than during the first five months of 2021. Commerical starts advanced 17% and institutional starts rose 2%, while manufacturing starts were 97% higher on a year-to-date basis.
For the 12 months ending May 2022, nonresidential building starts were 20 percent higher than in the 12 months ending May 2021. Commercial starts grew 18 percent, institutional starts rose 9 percent, and manufacturing starts swelled 116 percent on a 12-month rolling sum basis.
The largest nonresidential building projects to break ground in May were the $950 million Meta Hyperscale data center in Temple, Texas, the $940 million Digital Dulles data center in Dulles, Virginia and a $540 million mixed-use building in New York City.