News Summary
In July, total construction starts in the U.S. dropped by 10.2% to an annual rate of $1.19 trillion, driven by a 30.1% decline in nonresidential building starts. However, nonbuilding construction projects saw a 20.4% increase. The overall construction sector shows a slight 1.6% rise year to date compared to the previous year, yet challenges remain in residential sectors, particularly multifamily starts. Regional variations also highlight differing economic conditions across the country as the industry adapts to these fluctuating trends.
Washington, D.C. – Total construction starts in the United States significantly decreased by 10.2% in July 2025, falling to a seasonally adjusted annual rate of $1.19 trillion. A major contributing factor to this downturn was the dramatic decline in nonresidential building starts, which plummeted by 30.1% during the same month. Despite the overall decline, nonbuilding construction projects saw a remarkable rise, with starts increasing by 20.4% in July.
The construction industry has shown some resilience in the year to date (YTD), with total construction starts up 1.6% compared to the previous year. Notably, nonresidential starts increased by 4.3%, although residential starts experienced a setback with a 4.4% YTD decline.
Nonresidential Building Trends
In July 2025, nonresidential building starts fell to an annual rate of $443 billion. The commercial sector faced challenges, with starts decreasing by 8.5% and office constructions normalizing to levels observed in 2024, showing a 33.1% month-over-month drop. Noteworthy declines were also seen in institutional starts, which were down by 4.6%, primarily due to a significant drop in education construction, which fell by 13.3%.
Manufacturing starts were particularly hard-hit, experiencing a staggering decrease of 84.7%. Despite these challenges, there were notable nonresidential projects that broke ground in July, including the $3.0 billion Empire Wind Offshore Wind Energy Project in New York and the $1.8 billion A’s Ballpark in Las Vegas.
Residential Construction Starts
Residential building starts also declined in July 2025, reaching an annual rate of $356 billion. This drop was marked by a 3.1% decrease in total residential starts. Single-family homes showed a slight increase of 1.2%, while multifamily starts saw a significant decline of 9.5%. Over the year, YTD residential construction has fallen by 4.4%, with single-family starts down 10.1% and multifamily starts up by 8.3%.
Nonbuilding Construction Growth
In a contrasting trend, nonbuilding construction experienced a robust growth, reaching an annual rate of $395 billion in July. Utilities saw the largest month-over-month increase at 127.2%, while miscellaneous nonbuilding categories grew by 50.0%. However, highway and bridge starts declined by 2.5%, and environmental public works dropped by 17.7%.
For the twelve months ending in July 2025, total construction starts increased by 4.1% when compared to the previous year. Nonresidential starts were up 4.6%, while residential starts faced a slight decrease of 0.7%. Nonbuilding projects improved even further, with a 9.3% increase over the same period.
Regional Construction Activity
Regionally, construction starts in July were up in the Northeast, while the Midwest, West, South Central, and South Atlantic regions all reported declines. This variation reflects local economic conditions and project availability across different areas.
As the construction industry navigates these fluctuations, analysts and industry experts emphasize the need for adaptive strategies. The trends experienced in July provide critical insights into the current state of the construction market as it looks ahead to the remainder of 2025.
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Author: STAFF HERE INDIANAPOLIS WRITER
INDIANAPOLIS STAFF WRITER The INDIANAPOLIS STAFF WRITER represents the experienced team at HEREIndianapolis.com, your go-to source for actionable local news and information in Indianapolis, Marion 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 Indianapolis 500, Indy Jazz Fest, and the Indiana State Fair. Our coverage extends to key organizations like the Indy Chamber and Visit Indy, plus leading businesses in motorsports and healthcare that power the local economy such as Indianapolis Motor Speedway and IU Health. As part of the broader HERE network, we provide comprehensive, credible insights into Indiana's dynamic landscape.
