News Summary
In a surprising turn of events, the construction industry experienced a notable decline in total starts, with a sharp drop in nonresidential building projects. While nonbuilding projects exhibited strong growth, residential construction also saw a decline. Factors contributing to these trends include reduced activity in the commercial sector and significant challenges in manufacturing starts. Regional disparities were evident, with varying trends across the Northeast and other regions. Despite the challenges faced in July, positive developments in nonbuilding categories may signal potential recovery for the industry moving forward.
New York City, NY — The construction industry experienced a significant downturn in July 2025, with total construction starts declining by 10.2% to a seasonally adjusted annual rate of $1.19 trillion. The most notable drop occurred in nonresidential building starts, which plummeted by 30.1% in the same month compared to the previous month. In addition, residential construction starts saw a slight decrease of 3.1%.
Despite the tough month for many sectors of the construction industry, the nonbuilding projects showed robust growth, surging 20.4% in July 2025. The total construction starts year-to-date (YTD) managed to maintain a slight increase of 1.6% compared to last year, with nonresidential starts rising by 4.3%. Conversely, residential starts YTD dipped significantly by 4.4%.
Detailed Construction Figures
For the 12 months ending July 2025, total construction starts were up 4.1% compared to the previous year. Within that time frame, residential starts experienced a marginal decline of 0.7%, while nonresidential starts improved by 4.6% and nonbuilding projects increased by 9.3%.
Nonresidential Buildings
In July, nonresidential building starts saw a contraction to an annual rate of $443 billion. The commercial sector recorded a 8.5% reduction in starts, as office construction found itself normalizing to levels similar to those in 2024, with a striking 33.1% decrease month-over-month. Institutional starts fell by 4.6%, particularly in education construction, which shrank by 13.3%.
Remarkably, manufacturing starts plummeted by 84.7%, signaling considerable challenges in that sector. However, despite the July downturn, nonresidential starts remain 4.3% higher YTD compared to last year, with commercial and industrial starts up by 5.5% and institutional starts rising by 3.0%.
Major Nonbuilding Projects
Within the nonbuilding construction category, which now stands at an annual rate of $395 billion, there were notable increases in specific sectors as utilities experienced a month-over-month surge of 127.2%. Miscellaneous nonbuilding projects also recorded a significant growth rate of 50.0%. However, highway and bridge starts fell by 2.5%, and environmental public works declined by 17.7%.
Major nonbuilding projects that broke ground in July included several significant energy and infrastructure developments such as the Empire Wind Offshore Wind Energy Project in New York at $3 billion, the A’s Ballpark in Las Vegas for $1.8 billion, and the Boardman to Hemingway Power Transmission Line in Oregon for $1.6 billion.
Residential Construction
On the residential side, building starts dropped to an annual rate of $356 billion. While single-family housing starts saw a slight uptick of 1.2%, multifamily housing starts suffered a 9.5% decline. As a result, residential starts YTD are down by 4.4%, with single-family starts contracting by 10.1%, although multifamily starts improved by 8.3%.
Some of the largest multifamily projects initiated in July included the Rangel Houses Comprehensive Repair/Renovation in New York at $552 million and the 20 Long Slip Apartment Tower-Pool in Jersey City, New Jersey, at a cost of $365 million.
Regional Trends
Regionally, construction starts saw growth in the Northeast but declines in the Midwest, West, South Central, and South Atlantic. The variation in construction activity across different regions emphasizes the unequal impacts of economic conditions on the construction industry.
In conclusion, while July marked a challenging month for construction in multiple sectors, the strong performance of nonbuilding projects may offer a path for recovery and growth as the market navigates ongoing economic fluctuations.
Deeper Dive: News & Info About This Topic
HERE Resources
Additional Resources
- Construction Starts Remained Flat in February
- Wikipedia: Construction
- Construction on Historic Redevelopment of Mary Ellen McCormack Housing Complex
- Google Search: Mary Ellen McCormack Housing Complex
- AHSC Starts Construction on Boston Affordable Project
- Google Scholar: Boston Affordable Construction
- Construction Starts on Crescent Towing and Boston Towing Newbuilds
- Encyclopedia Britannica: Towing
- Construction Begins on Turning Empty Office Space into Residential Units
- Google News: Office Space to Residential Construction
Author: STAFF HERE MILWAUKEE WRITER
MILWAUKEE STAFF WRITER The MILWAUKEE STAFF WRITER represents the experienced team at HEREMilwaukee.com, your go-to source for actionable local news and information in Milwaukee, Milwaukee County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Summerfest, Milwaukee Film Festival, and the Milwaukee Boat Show. Our coverage extends to key organizations like the Metropolitan Milwaukee Association of Commerce and Visit Milwaukee, plus leading businesses in manufacturing and brewing that power the local economy such as Harley-Davidson and MillerCoors. As part of the broader HERE network, we provide comprehensive, credible insights into Wisconsin's dynamic landscape.
