Commercial Groundbreakings Plunge 18.4% in September

By Priya Raman

Commercial construction groundbreakings fell 18.4% month over month in September, dragging total construction starts down 1.5% to a seasonally adjusted annual rate of $1.33 trillion. The numbers come from a Wednesday report by Dodge Construction Network.

The September dip follows a much sharper pullback. Total starts dropped 24.8% month over month in August, a decline Dodge attributes to a megaproject slowdown. Nonresidential starts (offices, retail, schools and other non-housing buildings) fell another 6.3% in September.

One sector's collapse was another sector's gain. Institutional starts climbed 16.3% month over month.

"Construction starts edged lower in September, but gains in institutional and nonbuilding construction helped cushion the decline," said Sarah Martin, director of economic research at Dodge Construction Network, in the report. "These sectors provided a counterweight to weaker commercial and single-family starts."

Which sectors fell hardest?

Commercial construction — which includes retail and warehouse projects — posted some of the steepest monthly drops in the report:

• Hotel groundbreakings tumbled 46.3% after a strong August.
• Manufacturing starts fell 21% month over month.
• Residential construction slipped 0.3% month over month. On a year-to-date basis, residential starts are down 1.7%.

What grew in September?

Institutional construction, covering education and healthcare, rose 16.3% month over month. Education starts drove most of that gain, jumping 38.4%.

Nonbuilding work (highways, bridges and utilities) also improved. Highway and bridge groundbreakings rose 20.8% month over month. Utility projects slipped 4.1%.

What does this change for the year?

Despite the monthly weakness, 2026 remains well ahead of last year. Total starts increased 14.3% through the first nine months of 2026 compared with the same period in 2025. Nonresidential starts improved 23.7% over that span, and nonbuilding starts gained 18.4%.

The pipeline of megaprojects breaking ground in September explains some of that year-to-date strength. Dodge's list of the largest September groundbreakings:

• $4.6 billion South Valley data center, Silver Springs, Nevada.
• $4.3 billion Beacon Point data center, Robstown, Texas.
• $2 billion Vantage V41 data center campus, Fredericksburg, Virginia.
• $1.7 billion Big Rooter Power Solar project, Bremond, Texas.
• $1.6 billion Entergy Cypress Solar project, Redfield, Arkansas.
• $1.2 billion Southwest Inertie North power lines project, Jerome, Nevada.
• $820 million Four Seasons condominium tower, Austin, Texas.
• $544 million One Montague Place Mixed Residential & Commercial Tower, Brooklyn Heights, New York.
• $329 million Ombelle Mixed Use Residential Tower, Fort Lauderdale, Florida.

Data centers and energy infrastructure dominate that list, with six of the nine largest projects worth $1.2 billion or more falling in those categories. If commercial and residential starts keep contracting while institutional and nonbuilding work expands, the mix of US construction — and the contractors, suppliers and trades dependent on it — will keep shifting toward public and digital infrastructure.