Construction Starts Forecast Five-Year Projections by Structure and State

Compared to the average for the year 2024, current total spending YTD is up 2.6%, but is expected to pick a little up throughout the year across all sectors. The drop gives back much of July’s surge in activity levels, when a wave of large data center and manufacturing projects turned dirt. Construction groundbreakings are on a megaproject roller coaster. Activity through the first eight months of 2026 still outpaced levels at this time last year, according to Dodge Construction Network. Nonresidential construction posted strong early-2026 growth, but megaproject volatility and data…

Healthcare activity, on the other hand, bucked that trend with a 96.1% month-to-month jump following a weak in July, according to the report. Other sectors, however, are facing less activity due to deep labor shortages and accelerating material prices, she said. “After a pop in activity last month, construction starts largely normalized throughout August,” said Sarah Martin, director of economic research at Dodge Construction Network. Read the latest quarterly Construction Starts Forecast Report to get a five-year forecast of construction starts by type of structure and by state, as well as drivers influencing each building sector. In Canada, the outlook is weaker and broader based, with all major sectors expected to move lower.For contractors, distributors and manufacturers, the takeaway is not just that U.S. https://ecobusinessdesign.com/some-types-of-construction-work-in-construction.html growth remains intact. Total Canadian construction starts fell 41.3% year-over-year in the first quarter.The sharpest declines came from Nonresidential building, down 68.2%, and Civil construction, down 43.6%.

If new construction starts in the year are greater than construction spending in the year, then for the following year starting backlog increases. The last time starting backlog decreased was 2011. There are https://breakingnews77.com/finance/page/6 not yet any impacts from tariffs reflected in the jobs numbers.

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BOSTON, MA — November 21, 2025 — Total construction starts were up 21.1% in October to a seasonally adjusted annual rate of $1.53 trillion, according to Dodge Construction Network.

Also remember, PPI does not include imports or tariffs on imports. We may not know the total impact for several more months. I’ve increased the inflation outlook since Feb to a range of 4.5% to 5%. That in turn could slow capital expenditures, which, in this case, is new construction starts. Many economists predict the current trade impacts will slow overall economic growth. Typical jobs growth is 2.5% to 3.5% per year, even though spending can sometimes far outpace that.

Construction Volume is a measure of business activity. In 2022, Nonresidential buildings inflation was 12%, so business volume was 12% less than spending, or 12% less than revenue. Spending during the year is the value of business volume plus the inflation on that volume. This update changes the Constant$ amount, but not the Constant$ percent growth. This shows business volume year to year, can be a lot different than spending would indicate.

Future workload from https://labverra.com/articles/civil-engineering-jobs-uae/ new starts is piling up faster than the current workforce can complete. From 2015 through 2019, new construction starts were steady at 4% greater than spending. Since 2020, construction starts have been greater than construction spending, therefore backlog is increasing, but the spread is decreasing. Spending each year is subtracted from starting backlog and new starts are added to get starting backlog in the following year. Adjusted starts are spread over time to generate cash flow. It’s when new starts don’t replenish the amount of spending in the year that backlog declines.

• Spending each year is subtracted from starting backlog and new starts are added to get starting backlog in the following year.
• Residential current rate of spending is a bit less than 2% above the 2024 average.
• The 2018 steel tariffs of +25% applied on imported steel.
• There have been major revisions to new starts since the June and July starts reports.
• Public Utilities SAAR rate of spending begins the year 6% higher than the average for 2023, with the current rate increasing at an average over 1%/month for 2024.

Construction Briefs Apr 2025

• Separately, building permits, an indicator of future construction activity, rose 5.0% to 1.44 million in July.
• Non-building Infrastructure current rate of spending is only 1% higher than the average for 2024, however the forecast is indicating steady growth of 1.5%/mo for all of 2025.
• These two plots show nonres bldgs as it was forecast based on June data on Aug. 1, and again as of Sept spending/Outlook22 starts data released Nov. 3.
• Nonresidential Bldgs starts in 2022 posted the largest ever one-year increase in new nonresidential buildings construction starts, up 40%.
• The inflation rates for those years confirms that almost all of the spending increases were inflation, not added business volume.
• “After a pop in activity last month, construction starts largely normalized throughout August,” said Sarah Martin, director of economic research at Dodge Construction Network.

In the first quarter 2026, megaproject starts reached $57.7 billion, up from $21.9 billion a year earlier. Megaprojects, defined as those valued at more than $1 billion, also continued to exert an outsized influence on the market. Regionally, total construction starts in October rose in the South Central (+84.9% m/m), Midwest (+18.8% m/m), South Atlantic (+8.7% m/m) and the West (+1.1% m/m). Institutional starts improved 3.7%, driven by gains in other institutional categories (+49.5% m/m) – and offset by declines in education buildings (-20.8% m/m) and healthcare facilities (-2.7% m/m). Commercial starts were up 19.5%, alongside growth in offices and data centers (+45.5% m/m) and retail stores (+15.1% m/m).

Jobs are slightly ahead of volume growth, particularly in the Non-building Infrastructure sector. This plot above shows Jobs and Volume growth closely match from 2011 to 2018. In fact, since 2016, the last time volume increased by more than 4%, jobs are up 22%. The plot below shows how consistent jobs growth has been over the last 14 years.