The construction industry should begin to feel some relief now that the Federal Reserve has begun to lower rates, said Richard Branch, chief economist at Dodge Construction Network.
Total construction starts up 6% in August at a seasonally adjusted annual rate of $1.2 trillion, according to Dodge. This positive momentum should continue advance at a modest paceespecially around the first quarter of 2025, Branch said.
“The Dodge Momentum Index has been steady, indicating that owners and developers feel reasonably confident that financial and market conditions will improve,” Branch said. “They will improve, but it will take successive rate cuts before they feel comfortable moving forward with these projects for start”.
Here are the top nine projects in the U.S. to start in August:
- The $2.9 billion modernization of Terminal 3 at San Francisco International Airport in San Francisco.
- The $1.3 billion Marshall County Electric Vehicle Plant in Byhalia, Mississippi.
- The $900 million Geisinger Wyoming Valley Hospital in Wilkes-Barre, Pennsylvania.
- The $861 million South Brooklyn Terminal for offshore wind generation in Sunset Park, New York.
- The $813 million second phase of the Bellefield Solar Farm in California City, California.
- An unnamed $631 million paving project in Honolulu, Hawaii.
- The $332 million West Brighton I & II Apartments in Richmond County, New York.
- The $248 million The Downs mixed-use building in Northville, Michigan.
- The $235 million Cooper Park Commons in East Williamsburg, New York.
YTD growth begins
According to Dodge, total construction starts rose 4% in the first eight months of the year compared to the same period in 2023.
Non-residential starts were up 3%, while residential innovators were up 8%. Nonbuilding starts, such as highways, bridges and utility plants, fell 1% in the first eight months compared with last year.
On a monthly basis, non-residential construction starts fell 2% in August, largely due to a 21% drop in manufacturing starts and a larger 32% drop in general business starts , which includes offices, retail, warehouses and hotels, according to the report. . Those declines were nearly offset by a 32% increase in institutional starts, driven by educational buildings and airline terminals.
Non-building construction rose 17% in August, mainly due to a 57% increase in gas plant and utility projects. According to Dodge, housing starts improved 5% in August due to growth in both multi-family and single-family starts.
