ConDig (23-Mar-26) Total US construction starts fell sharply in February, dragged down by a steep pullback in nonbuilding activity, according to new data from Dodge Construction Network.
Overall construction starts declined 13.2% in February to a seasonally adjusted annual rate of $1.08 trillion. The drop came despite gains in both residential and nonresidential building activity, highlighting the outsized impact of volatile nonbuilding sectors.
“After a weak start to the year, nonresidential and residential building starts steadily rebounded throughout February,” said Sarah Martin, associate director of forecasting at Dodge Construction Network. “Conversely, nonbuilding activity slowed down last month – normalizing from elevated levels in January.”
Nonbuilding slump offsets building gains
Nonbuilding construction starts plunged 49.4% in February, reversing a surge in January. The decline was driven primarily by a sharp contraction in electric power and utilities projects, which dropped 90.1% month-on-month after nearly tripling in January.
Other nonbuilding categories also weakened, including miscellaneous public works, which fell 12.3%. However, some segments posted gains, with highways and bridges rising 18.8% and environmental public works increasing 4.8%.
The volatility in nonbuilding activity masked stronger performance in other sectors. Residential construction starts rose 8.3% to a $374 billion annual rate, while nonresidential building starts increased 17.8% to $442 billion.
Residential and nonresidential rebound
Within residential construction, single-family starts increased 4.0% in February, while multifamily starts jumped 15.9%.
Despite the monthly rebound, residential activity remains weaker on a broader basis. Year to date, residential starts are down 12.4%, with single-family construction falling 17.5% and multifamily down 2.8%. Over the past 12 months, total residential starts declined 6.3%, reflecting ongoing pressure in the single-family segment.
In nonresidential construction, commercial starts surged 48.5% in February, driven by a sharp increase in office and data center projects, which rose 159.6% month on month.
Institutional building also grew, rising 8.7%, supported by gains in education and other public building categories. However, healthcare construction fell 46.6% during the month, and manufacturing starts dropped 54.1% following strong activity in January.
On a year-to-date basis, nonresidential starts are down 2.0%, with commercial and industrial construction up 22.9% but institutional building down 22.7%.
Large projects highlight data center and infrastructure demand
Several major projects broke ground in February, underscoring continued investment in data centers and infrastructure.
The largest nonresidential projects included the $3 billion Google Data Center Campus (Project Meitner) in Miami, Texas, the $3 billion Polaris Forge 2 AI Data Center in Harwood, North Dakota, and the $1.53 billion Tampa International Airport Airside D project in Florida.
In the residential sector, the largest multifamily developments included the $757 million Bay View Houses renovation in New York, as well as major residential conversion projects in Washington, DC.
Major nonbuilding projects included the $564 million SR 400 (I-4) highway development in Florida, the $389 million I-94 reconstruction project in Michigan, and a $386 million wet weather pump station project in Pennsylvania.
Mixed regional performance
Regionally, construction activity showed a mixed picture in February. Starts increased in the Midwest, up 41.0% month on month, and in the West, which rose 4.2%.
However, activity declined in several key regions, including the Northeast (-38.1%), the South Atlantic (-4.9%) and the South Central (-37.7%).
Longer-term trends remain positive
Despite the monthly decline, longer-term indicators remain more resilient. For the 12 months ending February 2026, total construction starts were up 5.2% compared with the previous year.
Nonresidential construction increased 6.1% over that period, while nonbuilding activity rose 17.0%. Residential construction, however, continued to lag, falling 6.3% year on year.
Year to date, total construction starts are down 1.9% through February, reflecting ongoing volatility across sectors as the industry adjusts to shifting economic conditions.