Sharp Decline in Nonresidential Construction Starts

New York, August 21, 2025

News Summary

In July, nonresidential construction starts plummeted by 30.1%, contributing to a broader decrease in total construction activity, which fell by 10.2%. Despite a notable 20.4% growth in nonbuilding construction, challenges persisted in residential construction, with starts down 3.1%. Year-to-date figures show a mixed performance across sectors, with nonresidential starts up by 4.3% as compared to the previous year. Key projects initiated include the Empire Wind Offshore Wind Energy Project and A’s Ballpark in Las Vegas.

City: New York

Nonresidential construction starts experienced a drastic drop of 30.1% in July 2025, following a concerning trend that impacted the overall construction industry. Total construction starts decreased by 10.2%, reaching a seasonally adjusted annual rate of $1.19 trillion. This decline comes despite a robust 20.4% growth in nonbuilding construction, indicating shifting dynamics in the construction sector.

In July, residential construction also faced challenges, with starts down by 3.1%. While the year-to-date (YTD) statistics show an overall increase in total construction starts by 1.6% compared to the previous year, the monthly performance reveals critical setbacks for nonresidential and residential building sectors.

Year-to-Date Overview

Year-to-date totals reflect mixed performance across various construction categories. Nonresidential starts have increased by 4.3% compared to July 2024, whereas residential starts have declined by 4.4%. In stark contrast, nonbuilding starts have grown by 5.3% YTD, with notable increases in utilities and miscellaneous projects driving the uptrend. For the 12 months ending July 2025, total construction starts rose by 4.1%, with nonresidential starts up by 4.6%, and nonbuilding starts improving by 9.3%.

Nonresidential Building Details

The nonresidential sector faced a setback, with construction starts dropping to an annual rate of $443 billion. Significant declines were seen in commercial starts, which decreased by 8.5%, while institutional starts fell by 4.6%. Manufacturing construction plummeted by an alarming 84.7%, indicating heightened volatility in this segment. Notably, highway and bridge construction experienced a 2.5% reduction, and environmental public works saw a drop of 17.7%.

Major Projects Initiated

Despite the downturn, some major nonbuilding projects broke ground in July, including the Empire Wind Offshore Wind Energy Project in New York, valued at $3.0 billion, and the A’s Ballpark in Las Vegas, Nevada, which is projected to cost $1.8 billion. Additionally, the Boardman to Hemingway Power Transmission Line in Oregon was initiated with an estimated budget of $1.6 billion.

Residential Construction Trends

The residential construction sector continued to face headwinds, with starts decreasing to an annual rate of $356 billion in July. Single-family home starts saw a slight increase of 1.2%, while multifamily units fell by 9.5%. Year-to-date residential construction shows a downtrend of 4.4%, as single-family starts dropped by 10.1% whilst multifamily construction grew by 8.3%.

Notable Multifamily Projects

Among the prominent multifamily projects initiated in July were the Rangel Houses Comprehensive Repair/Renovation in New York, with a budget of $552 million, and the 20 Long Slip Apartment Tower-Pool in Jersey City, New Jersey, anticipated to cost $365 million.

Regional Performance

In terms of regional construction activity, July showed an uptick in the Northeast while performance declined in the Midwest, West, South Central, and South Atlantic. These regional nuances highlight the varying effects of market demand and project availability across different areas.

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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

Author: STAFF HERE PHOENIX WRITER

PHOENIX STAFF WRITER The PHOENIX STAFF WRITER represents the experienced team at HEREPhoenix.com, your go-to source for actionable local news and information in Phoenix, Maricopa County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Waste Management Phoenix Open, Cactus League Spring Training, and Arizona State Fair. Our coverage extends to key organizations like the Greater Phoenix Chamber of Commerce and Visit Phoenix, plus leading businesses in technology and healthcare that power the local economy such as Intel and Banner Health. As part of the broader HERE network, including HERETucson.com, we provide comprehensive, credible insights into Arizona's dynamic landscape.