News Summary
In July, U.S. construction starts experienced a notable decrease of 10.2%, primarily driven by a sharp decline in nonresidential building activity, which recorded a 30.1% fall. Residential construction also saw a decline of 3.1%, while nonbuilding projects increased by 20.4%. Despite these drops, total construction starts have improved by 1.6% compared to last year. The nonbuilding sector demonstrated growth, especially in utilities. However, nonresidential and residential sectors faced significant challenges, showcasing a complex landscape in the construction industry.
New York, NY – Construction starts nationwide took a significant downturn in July 2025, with total starts decreasing by 10.2% to a seasonally adjusted annual rate of $1.19 trillion. This decline was primarily driven by a notable drop in nonresidential building activity, which plummeted by 30.1% compared to the previous month.
In addition to the sharp fall in nonresidential building starts, residential construction also experienced a decrease, with overall residential starts down by 3.1%. However, the nonbuilding category, which encompasses infrastructure projects, showed a healthy increase, rising by 20.4% in July 2025.
Year-to-date statistics indicate that total construction starts have seen a modest improvement of 1.6% when compared to the previous year. Notably, nonresidential starts for the year are up by 4.3%, while residential starts have fallen by 4.4%. For the same timeframe, nonbuilding starts have increased by 5.3%.
Across the previous 12 months, total construction starts rose by 4.1% compared to the same period last year. Specifically, nonresidential building starts showed a year-over-year increase of 4.6%, while residential starts experienced a decrease of 0.7%.
Nonbuilding Projects Surge Amidst Decrease in Other Sectors
Nonbuilding construction reached an annual rate of $395 billion in July, driven by significant growth in the utilities sector, which saw a month-over-month increase of 127.2%, and miscellaneous nonbuilding projects, which expanded by 50.0%. It is important to note that highway and bridge starts fell by 2.5%, and environmental public works plunged by 17.7%.
Key nonbuilding projects that started in July included the Empire Wind Offshore Wind Energy Project in New York valued at $3 billion, the A’s Ballpark in Las Vegas, Nevada at $1.8 billion, and the Boardman to Hemingway Power Transmission Line in Oregon worth $1.6 billion.
Nonresidential Building Challenges
Nonresidential building starts decreased to a rate of $443 billion in July, with commercial starts witnessing an 8.5% dip. Notably, office construction saw a dramatic normalization to levels comparable to 2024, plummeting by 33.1% month-over-month. Additionally, institutional starts fell by 4.6% due to marked reductions in educational construction, down 13.3%.
Manufacturing starts faced a staggering decline of 84.7% in July, leading to concerns about the future of industrial projects. However, commercial and industrial starts showed a positive trend year-to-date, with an increase of 5.5%, while institutional construction saw a 3.0% rise.
Residential Market Faces Setbacks
In the residential sector, starts dropped to an annual rate of $356 billion in July, even as single-family home construction slightly increased by 1.2%. On the other hand, multifamily starts fell significantly by 9.5%. Year-to-date residential construction is down by 4.4%, largely due to a 10.1% decrease in single-family starts, while multifamily projects managed a 8.3% rise.
Over the past 12 months, residential starts overall decreased by 0.7%. Significant multifamily projects started in July include the Rangel Houses Comprehensive Repair/Renovation in New York at $552 million and the 20 Long Slip Apartment Tower-Pool in Jersey City, New Jersey, valued at $365 million.
Regional Variations in Construction Activity
Construction activity levels varied by region in July, with the Northeast reporting increases, while the Midwest, West, South Central, and South Atlantic saw reductions in construction starts.
This sharp decline in nonresidential construction amid significant growth in nonbuilding projects reflects a complex landscape within the U.S. construction industry as it navigates various challenges and opportunities in 2025.
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Additional Resources
- Construction Starts Remained Flat in February
- Wikipedia: Construction
- Construction on Historic Redevelopment of Mary Ellen McCormack Housing Complex
- Google Search: Mary Ellen McCormack Housing Complex
- AHSC Starts Construction on Boston Affordable Project
- Google Scholar: Boston Affordable Construction
- Construction Starts on Crescent Towing and Boston Towing Newbuilds
- Encyclopedia Britannica: Towing
- Construction Begins on Turning Empty Office Space into Residential Units
- Google News: Office Space to Residential Construction
Author: STAFF HERE NEW YORK WRITER
NEW YORK STAFF WRITER The NEW YORK STAFF WRITER represents the experienced team at HERENewYork.com, your go-to source for actionable local news and information in New York, the five boroughs, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as New York Fashion Week, Macy's Thanksgiving Day Parade, and Tribeca Film Festival. Our coverage extends to key organizations like the Greater New York Chamber of Commerce and United Way of New York, plus leading businesses in finance and media that power the local economy such as JPMorgan Chase, Goldman Sachs, and Bloomberg. As part of the broader HERE network, including HEREBuffalo.com, we provide comprehensive, credible insights into New York's dynamic landscape.
