News Summary
Total construction starts saw a modest rise, primarily fueled by growth in nonbuilding and multifamily projects. Despite the overall increase, sector performances varied, with residential construction showing mixed results. Multifamily housing starts surged, reflecting a change in consumer preferences, while single-family starts declined. Notably, commercial construction faced significant challenges, particularly in warehouse and retail sectors. Regional disparities highlighted contrasting trends, as some areas saw significant gains while others experienced declines. The construction landscape remains complex, presenting both opportunities and challenges.
Washington D.C. – Total construction starts rose by 1.7% in August 2025, reaching a seasonally adjusted annual rate of $1.23 trillion, primarily driven by increased activity in nonbuilding and multifamily projects. While the overall numbers look promising, the breakdown reveals mixed performance across various sectors of construction.
Residential construction starts experienced a 2.4% uptick during the month, bringing the annual rate in this category to $364 billion. However, this rise was coupled with a decline in single-family residential starts, which fell by 5.4%. Conversely, multifamily starts surged by 15.5%, suggesting a shift in housing demand preferences among consumers.
Meanwhile, nonbuilding construction starts showed a significant increase of 9.3%. Year-to-date, total construction activity has grown by 1.9% when compared to the same period last year, with nonresidential starts up by 3.4% but residential starts down by 5.0% for this year-to-date period.
Sector Performance Overview
Though the overall construction starts indicate progress, the nonresidential building sector faced a decline of 5.4% in August, resulting in a seasonally adjusted monthly rate of $431 billion. This downturn is particularly highlighted by commercial starts, which saw a notable week-to-week decline of 12.0%. Specific commercial categories suffered more severely, with warehouse starts plunging by 25.3% and retail stores decreasing by 11.3% month-over-month.
On a brighter note, institutional starts showcased resilience, climbing by 3.7%. This growth was primarily driven by improvements in educational buildings, which rose by 0.5%, and healthcare facilities, which increased by 2.8%. Other institutional projects saw a remarkable rise of 9.9%.
In contrast, the manufacturing sector experienced volatility, with starts dropping 24.4% in August following an extraordinary drop of 84.8% in July. Year-to-date, nonresidential construction starts remain positive, having risen by 3.4% compared to the same timeframe in 2024. Over the preceding 12 months, commercial starts increased by 17.4%, but the manufacturing sector saw a steep decrease of 27.4%.
Significant Nonbuilding Projects in August
Several major nonbuilding projects contributed to the growth in this segment, including the $5.1 billion Woodside Louisiana LNG Facility in Sulphur, Louisiana, and the $2.9 billion Cheniere Corpus Christi LNG Facility in Texas. Additionally, the Kingston Energy Complex in Tennessee—with battery storage—was valued at $1.8 billion.
Residential Construction Trends
In the residential sector, multifamily projects have emerged as a strong area of growth. Year-to-date, multifamily construction has improved by 9.9%, contrasting with a 11.7% decrease in single-family starts. For the 12 months ending August 2025, total residential starts have dropped by 1.2% compared to last year, with single-family starts down by 5.9% and multifamily projects up by 8.6%.
Noteworthy Multifamily Projects
Several key multifamily developments that commenced in August include the $619 million Kuilei Place Mixed-Use Residential Tower in Hawaii, the $413 million 120 Brickell Residences in Miami, and the $383 million Coles Street Mixed-Use Development in Jersey City, New Jersey.
Regional Variations
Regionally, construction starts in August were uneven. The South Central region noted a remarkable increase of 53%. In contrast, the Northeast experienced a significant drop of 25%, while the Midwest and West also faced declines of 10% and 12%, respectively. The South Atlantic region saw a nominal decrease of 2%.
In conclusion, while August 2025 saw a slight overall increase in construction starts, significant regional and sectoral disparities highlight the complex landscape of the construction industry. The growth in nonbuilding and multifamily sectors stands against a backdrop of declines in nonresidential and single-family projects, showcasing both opportunities and challenges ahead for the industry.
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Additional Resources
- Bisnow: New CEO of Boston Construction Firm
- Wikipedia: Construction
- Boston Agent Magazine: Apartment Construction in Boston
- Google Search: Construction Industry Trends
- Boston Globe: Construction Woman Cindy Stumpo
- Encyclopedia Britannica: Architecture
- NBC Boston: Trump Immigration Policy & Construction Industry
- Google News: Construction News
Author: STAFF HERE NEW YORK WRITER
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