Dodge: Total construction starts up to end 2022

Total construction starts jumped 27 percent in December to a seasonally adjusted annual rate of $1.18 trillion, according to Dodge Construction Network.

In December, nonresidential building starts increased 51 percent, nonbuilding starts increased 30 percent and residential starts rose less than 1 percent, according to Dodge.

Across 2022, total construction starts were 15 percent higher than in 2021. Nonresidential building starts rose 38 percent year over year, nonbuilding starts were up 19 percent and residential starts were down 3 percent.

“December starts revealed where the current strength in construction lies: manufacturing and infrastructure,” says Richard Branch, chief economist at Dodge. “It is those segments that will provide insulation for the sector as the economy softens in 2023. Recession or not, higher interest rates will weigh on the economy and restrain construction starts in 2023. However, it’s encouraging to know that the new year is starting with a great deal of positive momentum.”

Nonbuilding construction

Nonbuilding construction starts rose 30 percent in December to a seasonally adjusted annual rate of $281.4 billion.

The utility/gas category was the main driver of growth due to the start of a transmission line project, Dodge says. Miscellaneous nonbuilding starts rose 19 percent, and highway and bridge starts were up 10 percent in the month. Environmental public works fell 4 percent.

For the full year, total nonbuilding starts were up 19 percent from 2021. Starts activity in all sectors gained in 2022, led by utility/gas plants and its 26 percent gain. Highway and bridge starts were up 25 percent in 2022, environmental public works increased 15 percent and miscellaneous nonbuilding starts rose by less than 1 percent year over year.

The largest nonbuilding projects to break ground in December were the $2.2 billion Champlain Hudson Power Express transmission line across several counties in New York state, the $1.2 billion New Fortress Energy Louisiana LNG terminal in Grande Isle, Louisiana, and the $535 million Black Diamond solar project in Morgan and Sangamon counties, Illinois.

Nonresidential construction

Nonresidential building starts, meanwhile, gained 51 percent in December to a seasonally adjusted annual rate of $549.6 billion, due to a number of large manufacturing projects getting underway, according to Dodge.

In December, manufacturing starts rose 596 percent from November to December. Institutional starts gained 11 percent, with all subcategories improving while commercial starts fell 10 percent due to a pullback in office and hotel starts.

For the full year, nonresidential construction rose 38 percent from 2021, with manufacturing  leading all gains – up 185 percent over the year. Commercial starts were 25 percent higher in 2022, led by office and hotel activity, while warehouse and retail starts increased at a modest pace. Institutional starts were 19 percent higher in 2022, Dodge says. They were led by improvements in health care and education starts.

The largest nonresidential building projects to break ground in December were the $8.5 billion Golden Triangle Ethylene Cracker in Orange, Texas, the $2 billion AltAir/World Energy renewable fuels facility in Paramount, California, and the $1.4 billion Stellantis electric vehicle plant in Kokomo, Indiana.

Residential construction

Residential building starts remained flat in December at a seasonally adjusted annual rate of $353.8 billion.

Single-family starts lost 5 percent while multifamily starts gained 8 percent. Residential starts were 3 percent lower in 2022 versus 2021, with multifamily starts gaining 25 percent and single-family housing slipping 13 percent.

The largest multifamily structures to break ground in December were the $350 million first phase of the Hamilton Green complex in White Plains, New York, a $240 million mixed-use project on Dekalb Avenue in Brooklyn, New York, and the $230 million 54 Crown Street building in Crown Heights, New York.