News Summary
Total construction starts experienced a slight 1.7% increase driven by nonbuilding and multifamily projects, despite a decline in nonresidential building activity. The growth in nonbuilding construction, notably fueled by energy infrastructure projects, contrasted with challenges faced in commercial sectors. Residential construction showed mixed results, with multifamily projects rising while single-family starts fell. Regional performance varied, with significant gains in the South Central region, while the Northeast saw notable declines. Overall, the construction industry reflects a mixed performance amid ongoing challenges.
Washington, D.C. – Total construction starts saw a marginal increase of 1.7% in August 2025, reaching an annualized rate of $1.23 trillion. This rise was primarily driven by substantial gains in nonbuilding and multifamily construction, despite a notable decline in nonresidential building activity.
August experienced a strong growth in nonbuilding construction starts, which surged by 9.3%. In contrast, nonresidential building starts fell sharply by 5.4%, leading to a total nonresidential construction rate of $431 billion for the month. The commercial segment, in particular, faced challenges with starts decreasing by 12.0%, which included dramatic drops of 25.3% in warehouse construction and 11.3% in retail store projects.
Meanwhile, residential construction showed slight improvement with a 2.4% increase, bringing its annual construction rate to $364 billion. The growth in residential sectors was fueled by a 15.5% rise in multifamily projects, while single-family residential starts took a downturn, decreasing by 5.4% in August.
Year-to-date, total construction starts increased by 1.9% compared to the same period in the previous year. Nonbuilding starts have risen 8.1% for the year, while residential starts have taken a 5.0% hit over the same timeframe. Notably, nonresidential starts were up by 3.4% year-to-date, with significant disparities in performance across different sectors.
In the past 12 months ending August 2025, overall construction starts displayed a modest increase of 4.7% compared to the previous year. Nonresidential construction saw gains of 4.8%, but residential starts faced a decline of 1.2%. Within this timeframe, nonbuilding projects rose substantially by 12.1%.
Key projects initiated during August 2025 underline the strength of the nonbuilding sector. These include the $5.1 billion Woodside Louisiana LNG Facility in Sulphur, Louisiana, and the $2.9 billion Cheniere Corpus Christi LNG Facility in Gregory, Texas. Additionally, the $1.8 billion Kingston Energy Complex with battery storage in Kingston, Tennessee, showcased significant investment in energy infrastructure.
On the nonresidential side, major projects initiated included the $880 million Geisinger Medical Center Tower in Danville, Pennsylvania, the $666 million Fort Meade East Campus Office Building in Maryland, and the $540 million UM Shore Medical Center in Easton, Maryland.
Despite the overall increase in construction activity, regional performance varied. Construction starts in August were predominantly up in the South Central region by 53%. In contrast, declines were noted in the Northeast by 25%, Midwest by 10%, South Atlantic by 2%, and West by 12%.
For residential construction, while the overall starts rose in August, the year-to-date figures reveal a downturn. Year-to-date, residential starts decreased by 5.0%, with single-family starts down by 11.7%, contrasting with a 9.9% increase in multifamily projects. Over the past year, total residential starts decreased by 1.2%, with single-family falls of 5.9% and multifamily rises of 8.6%.
Noteworthy multifamily projects initiated in August include the $619 million Kuilei Place Mixed-Use Residential Tower in Honolulu, Hawaii, the $413 million 120 Brickell Residences in Miami, Florida, and the $383 million Coles Street Mixed-Use Development in Jersey City, New Jersey.
In summary, while August 2025 saw total construction starts rise slightly, the mixed performance highlights significant disparities across different sectors, reflecting ongoing challenges in the construction industry.
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