The 9 largest commercial construction starts of April 2025

Total U.S. construction starts declined 9% in April to a $1.03 trillion annual rate, led by a 22% drop in nonbuilding projects and softening in both nonresidential and residential sectors, according to Dodge Construction Network. The downturn, which follows a strong March, is attributed to project delays and economic uncertainty, with nonresidential starts down 10% year-to-date despite a 3% increase in commercial starts. While infrastructure-related construction struggled in April, year-to-date nonbuilding starts remain up 8% due to previous gains in utility work.

Analysis

Total U.S. construction starts experienced a significant contraction in April, falling 9% to a seasonally adjusted annual rate of $1.03 trillion, as reported by Dodge Construction Network. This decline was broad-based, with nonresidential building starts dropping 3%, residential activity falling 4%, and nonbuilding starts (infrastructure) posting the steepest decline at 22%. The Chief Economist at Dodge Construction Network, Eric Gaus, characterized this as an 'alarming shift' and a 'troubling signal,' linking the slowdown to project delays, fading momentum, and increased uncertainty stemming from April tariff announcements and broader trade policy concerns. Commercial construction starts plummeted 21% month-over-month, impacting retail, office, and warehouse segments, although institutional projects saw a modest 2% rise driven by healthcare and education. Notably, manufacturing construction rebounded sharply, jumping 78% in April, exemplified by projects like the GM and Samsung SDI battery cell factory. Despite the monthly downturn, year-to-date nonbuilding starts remain up 8%, buoyed by previous gains, while year-to-date nonresidential starts are down 10% overall, though commercial starts within this category are up 3%. Residential construction continued its softening trend, with both single-family (-5%) and multifamily (-3%) starts declining in April, contributing to a 5% year-to-date drop in total residential starts. The overall sentiment is negative, reflecting the broad-based declines and stated economic uncertainties.

Key Decisions for Investors

• Investors should exercise caution towards the broader construction sector given the significant April downturn and economist warnings about project delays, tariffs, and trade policy uncertainty.
• Consider focusing on specific sub-sectors demonstrating resilience or growth, such as manufacturing construction, which saw a 78% surge in April, and institutional projects, particularly in healthcare and education.
• Closely monitor leading indicators including the construction planning pipeline, developments in trade policy, and overall economic data, as these factors are expected to heavily influence future activity in the sector.
• Evaluate companies with exposure to large-scale manufacturing projects, like General Motors' battery plant, which may offer isolated strength despite the wider market slowdown, but remain aware of the broader sector headwinds.