News Summary
Construction activity in the U.S. saw a significant downturn in July, plummeting by 10.2% largely due to a steep decline in nonresidential building projects. While the nonresidential sector struggled, nonbuilding construction surged by 20.4%. In the residential sector, starts eased slightly with a modest drop. Regional variations further complicated the landscape, with some areas seeing growth while others faced declines. Despite these mixed signals, analysts indicate that overall activity remains relatively stable.
Construction Activity Declines Sharply in July 2025
New York City — Construction starts in July 2025 experienced a significant downturn, with total construction activity falling by 10.2%, according to recent industry data. The seasonally adjusted annual rate of all new projects amounted to approximately $1.19 trillion, marking a notable shift from previous months. This decline was largely driven by a sharp drop in nonresidential building projects, while nonbuilding and residential sectors saw varying performances.
Mixed Trends in Construction Sectors
Nonresidential Building Starts Drop Significantly
The nonresidential building sector faced a steep decline of 30.1% in July, with an annual rate of $443 billion. This sector’s downturn was widespread across categories:
- Commercial projects, including office buildings, decreased by 8.5%, with office development particularly stabilizing at levels comparable to 2024 averages, down by 33.1% over the month.
- Institutional projects declined by 4.6%, with education-related construction falling 13.3% compared to the previous month, and other institutional developments decreasing by 5.0%.
- Manufacturing starts saw an unprecedented plunge of 84.7%, reflecting a significant slowdown in industrial construction activity.
Despite the monthly setbacks, year-to-date (YTD) data indicates a 4.3% increase in nonresidential construction starts compared to the same period last year. Over the 12 months ending July 2025, activity is up by 4.6%, driven by ongoing projects and new developments.
Nonbuilding Construction Surges
In contrast, nonbuilding construction experienced robust growth in July, rising by 20.4% with an annual rate of approximately $395 billion. Noteworthy aspects include:
- Significant increases in utilities projects, which soared by 127.2% month-over-month, emphasizing economic vitality in energy infrastructure.
- Miscellaneous nonbuilding projects also grew substantially, by 50.0%.
- Major projects initiating in July included the Empire Wind Offshore Wind Energy Project in New York at $3.0 billion, the A’s Ballpark in Las Vegas valued at $1.8 billion, and the Boardman-to-Hemingway Power Transmission Line in Oregon costing $1.6 billion.
YTD nonbuilding starts are up 5.3%, and over the past year, activity in this segment has increased by 9.3%.
Residential Construction Experiences Modest Decline
Residential construction starts eased slightly in July, with a 3.1% decrease to an annual rate of $356 billion. Specific movements include:
- Single-family home starts increased marginally by 1.2%, indicating some stability in this segment.
- Multifamily projects, however, declined sharply by 9.5%, reflecting a cooling in apartment and condo developments.
YTD residential starts declined by 4.4%, with single-family homes down by 10.1%, but multifamily projects seeing an 8.3% uptick year-to-date. Looking at the last year, overall residential activity has decreased modestly by 0.7%.
Major Residential Developments in July
- Significant multifamily projects that broke ground include the Rangel Houses renovation in New York valued at $552 million and the 20 Long Slip Apartment Tower in Jersey City, costing $365 million.
Regional Variations in Construction Starts
Geographically, construction activity varied across the country:
- The Northeast experienced an increase in starts, indicating ongoing regional development momentum.
- Meanwhile, the Midwest, West, South Central, and South Atlantic regions saw declines, contributing to the overall national slowdown.
Expert Insights and Overall Market Context
Industry analysts note that the downturn in July follows a period of growth, with Eric Gaus, Chief Economist at Dodge Construction Network, highlighting that the month marked a reversal from June’s gains. Despite the slowdown, the year remains relatively stable overall, with total construction activity up 1.6% YTD compared to last year.
In summary, 2025’s first seven months demonstrate mixed signals: strong nonbuilding sector gains offset broader declines in residential and some nonresidential segments. Industry observers continue to monitor these trends for indications of future growth or contraction across the construction landscape.
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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
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