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Innovations improved to start the year in January, but a take a closer look at this growth reveals a general weakness, according to the Dodge Construction Network.
Total construction starts rose 0.7% month-on-month in January to a seasonally adjusted annual rate of $1.24 trillion. However, nonbuilding activity, which includes electric power and utility construction, accounted for most of that jump, said Eric Gaus, chief economist at Dodge Construction Network.
In fact, a handful of megaprojects in the non-construction sector underpinned the overall figures.
“Non-building construction remained the main driver of growth in the first month of 2026,” Gaus said. “Three mega-projects in the non-construction sector accounted for nearly $20 billion or almost half of the growth in January, which would mean that total construction would have been negative without these three projects.”
Non-residential new developments, for example, which include office and hotel construction, fell 15.4% month-on-month in January. Residential construction also fell 6.4% in the first month of 2026, the data showed.
A monthly increase of 10.2% and 6.5% in warehouse and retail activity could not reverse a 52.2% drop in the start of office and data center construction. Despite that drop, Gaus added that he still expects strong data center activity this year.
“While January’s levels were soft, they still landed 14% above January 2025,” Gaus told Construction Dive. “This largely reflects normal month-to-month volatility and does not alter our bullish outlook for data center construction in 2026, given strong industry fundamentals and ongoing projects in the pipeline.”
Meanwhile, institutional construction, including education and health projects, decreased by 15.2% month-on-month in January. On a positive note, manufacturing construction rose 97.5% month-on-month, after a Refrigeration to close in 2025according to Dodge.
This unbalanced growth was also shown during the last 12 months. Year-over-year, non-residential and residential project starts declined by 10.3% and 17% during that period. A significant 46.1% year-over-year increase in non-building construction kept total construction still up 5% compared to January 2025.
Here are the biggest projects to start in January, according to Dodge:
- The second phase of the $12 billion Port Arthur LNG project in Port Arthur, Texas.
- Homer City Energy’s $6 billion campus in Homer City, Pennsylvania.
- The $1.5 billion Tehuacana Creek 1 solar battery and storage project in Navarro, Texas.
- The $1.2 billion New York Presbyterian Cancer Center in New York City.
- The first phase of the $1 billion Amkor Semiconductor Advanced Packaging in Peoria, Arizona.
- The $714 million QTS CLT1 data center in York, South Carolina.
- The $335 million 38 Gramercy Park East Condominiums in New York City.
- The $265 million Lakeview residence in West Palm Beach, Florida.
- The $200 million Homestead Gateway mixed-use residential tower in Jersey City, New Jersey.
Nonbuilding construction, which posted the strongest growth in December, did the same once again to start 2026. New starts in the sector rose 24.3% month-over-month in January, largely due to a 184.8% increase in electric power and utility construction, according to Dodge. Highway and bridge starts, on the other hand, fell 42.3% month-on-month in January.
In the 12 months ending January 2026, total non-building starts improved by 21%, according to the report. That increase stemmed from a 67.9% increase in utility and gas starts over the past 12 months, although it was also slightly boosted by a 3.4% increase in highway and bridge construction.
Residential starts fell 6.4% month-over-month in January after a strong couple of months to close out the year in 2025. Single-family construction rose 1.5% month-over-month, but multifamily project starts fell 17.8% over the period.
In the 12 months ending in January 2026, total residential starts fell 6%, according to Dodge.
