Construction Industry Sees Modest March Growth, But Future Clouds Loom

Despite continued uncertainty surrounding the economy’s future, total construction starts jumped 3% in March to a seasonally adjusted annual rate of $1.1 trillion. According to Dodge Construction Network’s (DCN) monthly total construction starts index, nonresidential building starts grew by 6%, while residential starts decreased by 5%.

On a year-to-date basis through March, total construction starts were down 1% from last year. Nonresidential starts were down 9%, and residential starts were down 5%. On a year-to-year basis, total construction starts jumped 4%, residential starts were up 2%, and nonresidential starts grew by 3%.

“Construction activity grew over the month, but sector-specific data continued to show mixed trends,” says DCN’s chief economist Eric Gaus. “Looking ahead, growing uncertainty around trade policy and the economy’s direction will likely weigh on construction activity. Rising delays in the planning pipeline suggest developers are already bracing for impact, grappling with higher tariffs, dwindling federal funding, and ongoing labor shortages. We expect headwinds to grow as long as the uncertainty remains.”

Nonresidential

Nonresidential building starts improved 6% in March to a seasonally adjusted annual rate of $403 billion. Commercial starts were 21% higher in March, alongside stronger retail, office and warehouse starts. Conversely, institutional starts were down 12% in March following weaker dormitory, government building and transportation starts.

Manufacturing starts grew by 122% over the month. On a year-to-date basis through March, nonresidential starts are down 9% compared to March 2024. Commercial and institutional starts were up 3% over the same period.

The largest nonresidential building projects to break ground in March were the $1 billion Johnson & Johnson Biologics Manufacturing Facility in Wilson, North Carolina, the $800 million Capital One Arena Modernization in Washington, D.C., and the $750 million Amazon Robotics Fulfillment Center in Wilmington, North Carolina.

Residential

Residential building starts fell 5% in March to a seasonally adjusted annual rate of $377 billion. Single-family income starts decreased by 10%, while multifamily income starts increased by 4%. On a year-to-date basis through March, residential starts were down 5% compared to March 2024, single-family starts fell by 4%, and multifamily starts dropped by 6%.

The largest multifamily structures to break ground in March were the $1 billion Four Seasons Private Residences Las Vegas in Henderson, Nevada, the $357 million Flatiron Building Condominiums in New York, and the $276 million The Villa Miami Condominiums in Miami.

Regionally, total construction starts in March rose in the Northeast, South Central, and West, remained flat in the Midwest, and declined in the South Atlantic.