Nonresidential Building Starts Help Propel November Construction Growth

Total construction starts rose by 5% in November, buoyed by a substantial increase in nonbuilding starts and marginal growth in nonresidential building starts. The index, provided by Dodge Construction Network (DCN), shows that nonresidential starts increased by 2% in November, while nonbuilding starts surged by 16%. This helped offset a 1% decrease in residential starts.

On a year-to-year basis, total construction starts were up 4% from November 2023. Residential starts were up 7%, and nonresidential starts were up 2%.

“Construction starts continue to move sideways as the market waits for further rate cuts,” says Richard Branch, DCN’s chief economist. “Elevated interest rates, labor shortages and strict lending standards will continue to constrain construction activity in the near term.”

Nonresidential

DCN reports that commercial starts jumped 43% in November due to increased data center, warehouse, and parking garage starts. Institutional starts dropped by 9% after strong gains in October, and manufacturing starts fell 52%. Year-to-year, nonresidential building starts were up 2%, manufacturing starts were down 40%, commercial starts were up 5%, and institutional starts rose 18%.

The largest nonresidential building projects to break ground in November were the $3.4 billion Brooklyn Detention Facility in Boerum Hill, New York, the $1.4 billion AWS Amazon data center in Ridgeland, Mississippi, and the $750 million Frontier Scientific cold storage facility in Wilmington, North Carolina.

Residential

Single-family starts rose 5% in November, while multifamily starts dropped by 12%. For the 12 months ending November 2024, residential starts were 7% higher. Single-family starts were up 16%, while multifamily starts were 9% lower. The largest multifamily structures to break ground in November were the $675 million Utopia Living apartments in Flushing, New York, the $312 million Calyer Place residential building in Greenpoint, New York, and the $235 million Hoboken Connect mixed-use development in Hoboken, New Jersey.

Regionally, total construction starts in November rose in the Northeast, South Atlantic and West and South-Central regions but fell in the Midwest.