San Diego Construction1024 63cffdfcb7c79

Construction Market Ends 2022 On a High Note

Jan. 24, 2023
Total construction starts jumped +27% in December to a seasonally adjusted annual rate of $1.2 trillion, according to Dodge Construction Network. During the month, nonresidential building starts increased +51%, nonbuilding starts increased +30%, and residential starts rose less than one percent.

Across 2022, total construction starts were +15% higher than in 2021. Nonresidential building starts rose +38% over the year, nonbuilding starts were up +19%, and residential starts were down -3%.

“December starts revealed where the current strength in the construction lies -- manufacturing and infrastructure,” said Richard Branch, chief economist for Dodge Construction Network, in the press release. “It’s those segments that will provide insulation for the sector as the economy softens in 2023. Recession or not, higher interest rates will weigh on the economy and restrain construction starts in 2023. However, it’s encouraging to know that the new year is starting with a great deal of positive momentum.”

Nonresidential building starts gained +51% in December to a seasonally adjusted annual rate of $549.6 billion due to numerous large manufacturing projects getting underway. In December, manufacturing starts rose +596% from November to December. Institutional starts gained +11% with all subcategories improving. Commercial starts, however, fell -10% in December due to a pullback in office and hotel starts. For the full year, nonresidential construction rose +38% from 2021. Manufacturing construction activity led all gains, rising +185% over the year. Commercial starts were +25% higher in 2022, led by office and hotel activity, while warehouse and retail starts increased at a modest pace. Institutional starts were +19% higher in 2022, led by improvements in healthcare and education starts. The largest nonresidential building projects to break ground in December were the $8.5 billion Golden Triangle Ethylene Cracker in Orange, TX, the $2 billion AltAir/World Energy renewable fuels facility in Paramount, CA, and the $1.4 billion Stellantis electric vehicle plant in Kokomo, IN.

Residential building starts remained flat in December at a seasonally adjusted annual rate of $353.8 billion. Single family starts lost 5%, while multi-family starts gained +8%. Residential starts were -3% lower in 2022 when compared to 2021. Multi-family starts were up +25%, while single family housing slipped -13%.

The largest multi-family structures to break ground in December were the $350-million first phase of the Hamilton Green complex in White Plains, NY; a $240-million mixed-use project on Dekalb Ave in Brooklyn, NY; and the $230-million 54 Crown Street building in Crown Heights, NY.

Nonbuilding construction starts rose +30% in December to a seasonally adjusted annual rate of $281.4 billion. The utility/gas category was the main driver of the growth due to the start of a transmission line project. Miscellaneous nonbuilding starts rose +19% and highway and bridge starts were up +10%. However, environmental public works fell -4%. For the full year, total nonbuilding starts were up +19% from 2021. Starts activity in all sectors gained in 2022, led by utility/gas plants, which rose +26%. Highway and bridge starts were up +25% in the year, environmental public works increased by +15%, and miscellaneous nonbuilding starts rose by less than one percent.

The largest nonbuilding projects to break ground in December were the $2.2-billion Champlain Hudson Power Express transmission line across several counties in New York state, the $1.2-billion New Fortress Energy Louisiana LNG terminal in Grande Isle, LA, and the $535-million Black Diamond solar project in Morgan and Sangamon counties, IL.

Sponsored Recommendations