Construction Starts Slid 27% Nationwide in January
By Rebecca Baird-Remba February 28, 2023 5:34 pm
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The dollar value of new construction starts across the country declined 27 percent from December to January, to $866 billion, with nonresidential buildings — including offices, retail and factory buildings — plummeting 38 percent, according to data from Dodge Construction Network.
Meanwhile, the dollar value of new construction starts for residential properties slid 20 percent in January — to $289 billion — compared to December. Overall, total construction starts nationwide in January was 14 percent lower than the year before, according to Dodge.
However, the construction analytics firm argues that the slump in new starts isn’t necessarily the start of a negative trend.
“January’s decline in construction starts should not be taken as the beginning of a cyclical downturn in the industry,” said Richard Branch, the chief economist for Dodge. “Numerous megaprojects have begun over the last few months, obscuring the underlying trend in construction activity. While some construction sectors will face stress as the year progresses, current fundamentals point to an industry that is fairly well positioned to weather the storm.”
Dodge points to a 91 percent decline in groundbreakings for new manufacturing projects as the main reason nonresidential starts declined. Developers started work on several large industrial developments in December, the report noted, and construction starts on manufacturing buildings were up 190 percent on an annual basis over the 12 months ending in January 2023.
The three largest nonresidential projects to break ground nationwide in January were the $1 billion Primate Data Center campus in Elk Grove, Ill.; a $515 million Amazon data center in Hilliard, Ohio; and CoStar Group’s $460 million office campus in Richmond, Va.
On the residential side, the two largest projects to kick off in January were both in Brooklyn, according to Dodge. Domain Companies broke ground on the 360-unit development at 420 Carroll Street in Gowanus, and Madison Realty Capital started work on a 470-unit project at 75 Dupont Street in Greenpoint.
Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com.
