Construction Starts Plunged 24.8% in August as Megaprojects Paused

Total construction starts fell 24.8% month over month in August to a seasonally adjusted annual rate of $1.34 trillion, according to Dodge Construction Network data released Monday. The drop erases much of July's surge, when a wave of large data center and manufacturing projects broke ground.

"After a pop in activity last month, construction starts largely normalized throughout August," said Sarah Martin, director of economic research at Dodge Construction Network. "Abstracting from the month-to-month volatility, the story remains consistent."

That story, Martin said, is the strength of data center, semiconductor and energy construction for much of this year. Other sectors face less activity due to deep labor shortages and accelerating material prices.

The growth engines hit a slow patch to end the summer. Nonresidential starts dropped 32% month to month in August, with manufacturing construction posting the biggest pullback within the category, down 80.8%, according to the report. Office and data center groundbreaking plunged 31.3%.

Institutional construction also slowed, down 18.1% month over month, driven by weaker education starts, which fell 14.3% during the same period. Healthcare activity bucked the trend with a 96.1% month-to-month jump following a weak July.

Nonbuilding construction did not fare much better. Starts in the category dropped 26.7% month to month in August. Highway and bridge construction decreased 20.8% during that period.

Residential construction posted the smallest decline, down 5.2% month over month.

Despite the dip across all categories, construction starts still outpaced levels at this time last year. Total starts increased 15.2% through the first eight months of 2026, led by gains of 23.4% in nonresidential and 22.2% in nonbuilding construction. Residential starts decreased 1.8% over the same year-to-date period.

Per Dodge, the largest projects to break ground in August included:

• The $3.5 billion Amazon STACK Blanchard State Line data center in Mooringsport, Louisiana.
• The $3.5 billion Steel River energy center in Wilson, Arkansas.
• The $3.2 billion Clarksville hyperscale data center in Clarksville, Arkansas.
• The $2.9 billion Bronx detention facility in Mott Haven, New York.
• The $1.4 billion Bluegrass power generation project in Jeffersonville, Ohio.
• The $1.1 billion 655 Madison Ave. mixed-use tower in New York City.
• The $772 million Heritage Prairie Renewable wind farm in Dwight, Illinois.
• The $244 million The Residences at The Nashville Edition in Nashville, Tennessee.
• The $227 million 350 S. Fifth Ave. mixed-use and affordable housing development in Ann Arbor, Michigan.

The August figures underscore how tightly the construction cycle now tracks a small number of billion-dollar data center, energy and manufacturing projects — and how sharply monthly readings can swing when those megaproject starts bunch together or stall.