Total construction starts fell by 2% in December, led by declines in nonresidential starts (2%) and nonbuilding starts (14%).
Residential building starts rose by 4%. According to Sarah Martin, associate director of forecasting at Dodge Construction Network (DCN), the declines could be attributed to higher materials prices, labor shortages and the threat of tariffs.
For the 12 months ending December 2024, total construction starts were up 6% from the 12 months ending December 2023. Residential starts were up 7%, and nonresidential starts were up 4%.
“Rate cuts before December supported some momentum in multifamily and commercial starts over the month,” says Martin. “Sustained labor shortages and elevated materials prices will continue to add risk to the sector, in addition to the concern over tariffs and more strict immigration enforcement. Overall, the strength in the value of projects in planning and further Fed rate cuts should encourage growth in construction in 2025.”
Nonresidential
Nonresidential building starts rose 2% in December to a seasonally adjusted annual rate of $482 billion. Commercial starts were 6% higher in December due to increased data center, hotel and retail starts, while institutional starts fell 3%. Manufacturing starts rose 19% over the month. In 2024, total nonresidential starts were up 4%. Institutional starts were 16% higher, commercial starts were up 8%, and manufacturing starts were 35% lower yearly through December.
The largest nonresidential building projects to break ground in December were the $1.6 billion Lyndon B. Johnson Hospital Replacement in Houston, the $1.2 billion San Antonio International Airport Terminal C Development in San Antonio and the $1.1 billion Hard Rock Hotel in Las Vegas.
Residential
Residential building starts grew 4% in December to a seasonally adjusted annual rate of $397 billion. Single-family starts fell 3%, while multifamily starts were up 24%. In 2024, total residential starts were 7% higher. Single-family starts increased 15%, and multifamily starts were down 7% year-to-year through December.
In December, the largest multifamily structures to break ground were the $510 million St. Regis Residences development in Miami, the $350 million Reflections Lakeside Resort in Orlando, and the $210 million Ritz-Carlton Residences in The Woodlands, Texas.
Regionally, total construction starts in December rose in the Midwest and South Atlantic regions but fell in the Northeast, South Central, and West regions.
Source: USGlass with additional information added by GlassBalkan
