Total construction starts rose eight percent in October to a seasonally adjusted annual rate of $1.12 trillion, according to Dodge Construction Network. In October, nonresidential building starts gained nine percent.
Year-to-date, total construction was 16 percent higher in the first 10 months of 2022 compared to the same period of 2021. Nonresidential building starts rose 37 percent over the year. Regionally, total construction starts in October rose in the Midwest and South Atlantic regions, but fell in the South Central and West.
"October's gain in construction starts is a further sign that the construction sector continues to weather the storm of higher interest rates," says Richard Branch, chief economist for Dodge Construction Network. "While the residential sector is feeling the pain, the nonresidential building and infrastructure sectors are hitting their stride. Some weakness is to be expected as the Federal Reserve continues its battle with inflation; however, the damage should be isolated to a few verticals and not as widespread as what the industry witnessed during the Great Recession."
RESIDENTIAL BUILDING STARTS FALL SLIGHTLY
Residential building starts fell three percent in October to a seasonally adjusted annual rate of $366.4 billion. Single family starts lost three percent, while multifamily starts dropped four percent. Through the first 10 months of 2022, residential starts were flat when compared to the same time frame in 2021. Multifamily starts were up 26 percent.
The largest multifamily structures to break ground in October were the $564-million Long Island City Center II in Long Island City, New York, the $450-million Waldorf Astoria residences and hotel in Miami, and the $167-million Modera McGavock mixed-use building in Nashville.
RISE IN NONRESIDENTIAL
Nonresidential building starts rose nine percent in October to a seasonally adjusted annual rate of $480.5 billion. During the month, commercial starts rose 19 percent, led by office and hotel projects. Institutional starts rose eight percent due to a surge in education projects.
Through the first 10 months of 2022, nonresidential building starts were 37 percent higher than the first 10 months of 2021. Commercial starts grew 23 percent, and institutional starts rose 21 percent.
