News Summary
In July, nonresidential construction starts plummeted by 30.1%, contributing to a 10.2% drop in total construction activity. While residential construction also saw a minor decline, nonbuilding projects experienced a positive growth of 20.4%. Year-to-date results showed a modest overall increase, yet nonbuilding construction continued to thrive. Regional trends varied, with improvements in the Northeast and declines in other areas. Despite recent challenges, certain segments within the construction sector still show potential for growth.
New York City – Nonresidential construction starts suffered a steep decline of 30.1% in July 2025, contributing to a broader decrease in total construction activity, which fell 10.2% to a seasonally adjusted annual rate of $1.19 trillion. The slump in nonresidential building was complemented by a minor 3.1% decrease in residential construction starts during the month.
Despite the overall downturn in July, nonbuilding projects experienced significant growth, with an increase of 20.4% for the month. This reflects a nuanced landscape in the construction sector, where nonbuilding construction proceedings reached an annual rate of $395 billion.
Year-to-Date and Year-Over-Year Trends
Year-to-date (YTD) totals indicate a modest overall growth of 1.6% when compared to the same period last year. Within this timeframe, nonresidential starts showed a stronger performance, increasing by 4.3%. Conversely, the residential sector has faced challenges, with starts down 4.4%. Notably, nonbuilding construction has demonstrated resilience, rising by 5.3% YTD.
From a year-over-year perspective, total construction starts have improved by 4.1% for the 12 months ending July 2025. Nonresidential construction showed promising growth, up 4.6%, while residential starts slightly declined by 0.7%.
Sector Analysis
Nonresidential building starts have encountered pronounced setbacks, falling to an annual rate of $443 billion. Within this sector, commercial starts witnessed a notable decrease of 8.5%. Office-related projects have similarly normalized to levels akin to the 2024 average, down 33.1% month-over-month. Institutional starts also decreased by 4.6% with specific declines noted in education construction and other institutional categories.
A drastic downturn was observed in manufacturing starts, which plummeted by 84.7% in July. On the positive side, industrial and commercial starts have risen by 5.5% and institutional starts increased by 3.0% YTD compared to July 2024.
Nonbuilding Sector Growth
Key highlights from the nonbuilding sector reveal remarkable month-over-month performance in utility construction, which soared by 127.2%, alongside miscellaneous nonbuilding projects that grew by 50.0%. However, not all nonbuilding segments fared well; highway and bridge starts saw a reduction of 2.5%, while environmental public works dropped by 17.7%.
Among the major nonbuilding projects initiated in July were the Empire Wind Offshore Wind Energy Project in New York valued at $3.0 billion, the A’s Ballpark in Las Vegas ($1.8 billion), and the Boardman to Hemingway Power Transmission Line in Oregon ($1.6 billion).
Residential Construction Insights
In the residential sector, total starts fell to an annual rate of $356 billion. While single-family home starts rose by 1.2%, multifamily projects suffered a decline of 9.5% in July. Year-to-date data reflects a decline in overall residential starts, with single-family decreases at 10.1% and multifamily rising by 8.3%.
The downturn in residential activity is corroborated by year-over-year results, indicating a 0.7% decrease in total residential starts. Significant multifamily projects that commenced in July included the Rangel Houses Comprehensive Repair/Renovation in New York valued at $552 million and the 20 Long Slip Apartment Tower-Pool in New Jersey at $365 million.
Regional Construction Activity
Regionally, construction starts signaled varying trends, improving in the Northeast, while declining in the Midwest, West, South Central, and South Atlantic regions. These fluctuations indicate diverse local construction climates as the industry continues to respond to broader economic pressures.
In summary, while the construction industry faced considerable challenges in July 2025, particularly in the nonresidential building sector, the nonbuilding projects and some segments of residential construction continue to show potential for future growth.
Deeper Dive: News & Info About This Topic
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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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