Construction starts across the United States dropped sharply in August, erasing much of the gain recorded a month earlier when a cluster of large data center and manufacturing jobs broke ground, according to figures Dodge Construction Network released on Monday.
The seasonally adjusted annual rate of total construction starts fell 24.8% from July to August, landing at $1.34 trillion. The decline followed an unusually strong July in which megaprojects, particularly in the data center and manufacturing space, pushed activity sharply higher.
What drove the August construction starts decline
Sarah Martin, director of economic research at Dodge Construction Network, said the swing reflects normal volatility rather than a shift in the underlying trend. “After a pop in activity last month, construction starts largely normalized throughout August,” she said. “Abstracting from the month-to-month volatility, the story remains consistent.”
That underlying story, Martin noted, is continued strength in data center, semiconductor and energy work, even as other segments of the industry struggle with tight labor markets and rising material costs.
Nonresidential building starts sank 32% for the month, dragged down by an 80.8% collapse in manufacturing project starts. Office and data center groundbreakings, grouped together in the report, fell 31.3%. Institutional building slipped 18.1%, with education projects down 14.3%, though healthcare bucked the pattern with a 96.1% jump after a soft July.
Nonbuilding work, which covers infrastructure such as roads and utilities, dropped 26.7% in August, and highway and bridge starts alone fell 20.8%. Residential construction held up better, down just 5.2% on the month.
Year-to-date construction activity still ahead of 2025
Despite the August retreat, cumulative starts for the first eight months of 2026 remain well above the same period last year. Total starts are up 15.2% year to date, powered by a 23.4% increase in nonresidential construction and a 22.2% rise in nonbuilding work. Residential starts are down 1.8% over the same stretch.
Dodge’s list of the largest projects to break ground in August illustrates the continued weight of data centers and energy in the pipeline:
- A $3.5 billion Amazon-linked STACK data center near the Louisiana-Texas line at Mooringsport, Louisiana
- A $3.5 billion Steel River energy facility in Wilson, Arkansas
- A $3.2 billion hyperscale data center in Clarksville, Arkansas
- A $2.9 billion detention facility in the Mott Haven section of the Bronx, New York
- A $1.4 billion power plant known as the Bluegrass project in Jeffersonville, Ohio
- A $1.1 billion mixed-use tower at 655 Madison Avenue in New York City
- A $772 million wind farm called Heritage Prairie in Dwight, Illinois
- A $244 million residential development, The Residences at The Nashville Edition, in Nashville, Tennessee
- A $227 million mixed-income housing and retail project on South Fifth Avenue in Ann Arbor, Michigan
Dodge did not indicate in this release whether it expects September figures to rebound toward the pace set earlier in the summer.
Starts data is the earliest signal architects get about their own pipeline. For what the slowdown means for existing buildings, see adaptive reuse in architecture and the weight of the existing stock.
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