US Construction Starts Plunge 24.8% in August

Total construction starts fell 24.8% in August to a seasonally adjusted annual rate of $1.34 trillion, according to Dodge Construction Network. Nonresidential building starts dropped 32.0% over the month, nonbuilding starts declined 26.7%, and residential starts slipped 5.2%.

The monthly figures follow a surge in July. "After a pop in activity last month, construction starts largely normalized throughout August," stated Sarah Martin, director of economic research at Dodge Construction Network. "Abstracting from the month-to-month volatility, the story remains consistent. Data center, semiconductor and energy construction are driving growth, while several other sectors are facing subdued activity alongside deeper labor shortages, and accelerating material prices."

The longer-term trend remains positive. On a year-to-date basis through August, total construction starts were up 15.2%. Nonresidential starts gained 23.4%, nonbuilding starts improved 22.2%, and residential starts were down 1.8% over the same period. For the 12 months ending August 2026, total starts were up 14.5% from the 12 months ending August 2025, with nonresidential up 17.9%, nonbuilding up 27.6%, and residential down 2.4%.

Nonresidential

Nonresidential building starts fell 32.0% in August to a seasonally adjusted annual rate of $624 billion. Commercial starts led the decline, down 37.6% over the month.

Two commercial categories bucked the trend after a weak July: hotel construction more than tripled, rising 302.2% month over month, and retail store starts improved 26.9%. Every other commercial sector declined, including offices and data centers (-31.3%), parking garages (-24.9%), and warehouses (-13.4%).

Institutional starts pulled back 18.1%, driven by weaker education starts (-14.3%) and miscellaneous institutional starts (-39.1%). Healthcare starts normalized after a weak July, rising 96.1% over the month. Manufacturing construction fell 80.8% month over month, following substantial megaproject starts in July.

On a year-to-date basis, nonresidential starts are up 23.4%. Commercial and industrial construction have gained 47.7% over the same period, while institutional starts are down 3.9%. For the 12 months ending August 2026, commercial starts were up 48.6%, institutional starts decreased 4.3%, and manufacturing starts rose 2.8%.

The largest nonresidential projects to break ground in August were the $3.5 billion Amazon STACK Blanchard State Line Data Center (780 MW) in Mooringsport, Louisiana; the $3.2 billion Clarksville Hyperscale Data Center in Clarksville, Arkansas; and the $2.9 billion Bronx Detention Facility in Mott Haven, New York.

Residential

Residential building starts declined 5.2% in August to a seasonally adjusted annual rate of $364 billion. Single family starts remained essentially flat, growing 0.4% month over month, while multifamily starts dropped 13.5%.

On a year-to-date basis, residential starts are down 1.8%, with single family down 4.6% and multifamily up 3.0%. For the 12 months ending August 2026, single family starts fell 8.6% compared with the prior 12 months, while multifamily starts increased 8.7%.

The largest multifamily structures to break ground in August were the $1.1 billion 655 Madison Ave mixed use tower in New York, New York; the $244 million The Residences at The Nashville Edition, a hotel and condominium project in Nashville, Tennessee; and the $227 million 350 S. Fifth Avenue mixed use and affordable housing development in Ann Arbor, Michigan.

Regional split

Total construction starts fell in every US region in August except the South Central. The Northeast dropped 52.6% month over month, the West fell 51.4%, the South Atlantic declined 24.2%, and the Midwest slipped 1.1%. The South Central region gained 28.8% between July and August.

The August numbers point to a market increasingly dependent on a narrow set of high-value sectors — data centers, semiconductors and energy — a concentration Dodge's Martin says persists once monthly volatility is stripped out, even as labor shortages deepen and material prices accelerate.