Construction Starts Recede 1.5% in September

Institutional and Nonbuilding Gains Temper Declines in Commercial Starts

BOSTON, MA - October 21, 2026 - Total construction starts declined 1.5% in September to a seasonally adjusted annual rate of $1.33 trillion, according to Dodge Construction Network. Nonresidential building starts fell 6.3% over the month, residential starts ticked down 0.3%, and nonbuilding improved by 5.5%. On a year-to-date basis, total construction starts were up 14.3% through September. Nonresidential starts were up 23.7%, nonbuilding starts improved by 18.4%, and residential starts were down 1.7% over the same period. For the 12 months ending September 2026, total construction starts were up 13.6% from the 12 months ending September 2025. Residential starts were down 2.9%, nonresidential starts were up 18.7% and nonbuilding starts were up 23.6%.

"Construction starts edged lower in September, but gains in institutional and nonbuilding construction helped cushion the decline," said Sarah Martin, Director of Economic Research at Dodge Construction Network. "These sectors provided a counterweight to weaker commercial and single-family starts."

Nonresidential

Nonresidential building starts fell 6.3% in September to a seasonally adjusted annual rate of $583 billion. Commercial starts were down 18.4% over the month. After a very strong August, hotel activity settled back 46.3% in September, alongside a 21.4% decline in offices and data centers, as well as a 21.0% pull back in manufacturing starts. Meanwhile, parking garages (+33.9% m/m) and commercial warehouses (+0.8%) improved over the month. Institutional starts had a more positive month, improving 16.3% in September, driven by stronger education starts (38.4% m/m) and miscellaneous institutional starts (6.5% m/m). Healthcare starts declined 3.0% over the month. On a year-to-date basis through September, nonresidential starts are up 23.7%. Commercial and industrial construction have gained 46.3%, while institutional starts are down 1.8% over the same period.

For the 12 months ending September 2026, total nonresidential starts were up 18.7% compared to the 12 months ending September 2025. Commercial starts were up 47.7%, institutional starts decreased 2.8%, and manufacturing starts were up 3.4% over the same period.

The largest nonresidential building projects to break ground in September were $4.6 billion South Valley Data Center in Silver Springs, Nevada, the $4.3 billion Beacon Point Data Center in Robstown, Texas, and the $2.0 billion Vantage V41 Data Center Campus in Fredericksburg, Virginia.

Nonbuilding

Nonbuilding construction starts expanded 5.5% in September to a seasonally adjusted annual rate of $377 billion. Supporting this rise, highway and bridge starts grew 20.8% throughout September, alongside miscellaneous nonbuilding starts (+13.7% m/m) and environmental public works (+0.8% m/m). Utility starts, meanwhile, pulled back 4.1% over the month. On a year-to-date basis through September, nonbuilding construction was up 18.4% alongside the 70.1% year-to-date growth in electric power/utilities, 3.8% in miscellaneous nonbuilding, and 0.9% growth in highways and bridges. Environmental public works are down 4.1% year-to-date.

For the 12 months ending September 2026, total nonbuilding starts were up 23.6%. Environmental public works fell by 4.9% compared to the 12 months ending September 2025. Highway and bridge starts were up 1.3%, miscellaneous nonbuilding starts were up 11.3% and utility/gas starts increased 90.8% over the same period.

The largest nonbuilding projects to break ground in September included the $1.7 billion Big Rooter Power Solar project in Bremond, Texas, the $1.6 billion Entergy Cypress Solar project in Redfield, Arkansas, and the $1.2 million Southwest Inertie North power lines project in Jerome, Nevada.

Residential

Residential building starts ticked down 0.3% in September to a seasonally adjusted annual rate of $366 billion. Single family starts declined 7.4% m/m, while multifamily starts improved 11.3% m/m. On a year-to-date basis, residential starts are down 1.7%, with single family starts down 4.5% and multifamily starts up 3.0%.

For the 12 months ending September 2026, total residential starts fell 2.9%. Single family starts fell 7.6% compared to the 12 months ending September 2025, and multifamily starts increased 5.3% over the same period.

The largest multifamily structures to break ground in September included the $820 million Four Seasons condominium tower in Austin, Texas, the $544 million One Montague Place Mixed Residential & Commercial Tower in Brooklyn Heights, New York, and the $329 million Ombelle Mixed Use Residential Tower in Fort Lauderdale, Florida.

Regionally, total construction starts in September receded in the South Central (-20% m/m), Midwest (-13% m/m), and Northeast (-1% m/m). Conversely, the West (+33% m/m) and the South Atlantic (+7% m/m) improved over the month.