Commercial construction starts dropped 18.4% in September, and the only thing that kept the national total close to flat was a jump in school and highway work. Dodge Construction Network’s monthly starts report, released Oct. 21, put total starts at a seasonally adjusted annual rate of $1.33 trillion, down 1.5% from August.
That’s a soft landing after a hard one. August’s total had already fallen 24.8% as megaproject groundbreakings thinned out, Construction Dive reported. September didn’t win any of it back.
Where commercial construction starts gave ground
Hotels did the most damage, sliding 46.3% after a strong August. Dodge groups offices and data centers in one category, and it fell 21.4%. Manufacturing starts dropped 21%. Parking garages rose 33.9% and warehouses inched up 0.8%, which isn’t much of an offset. Nonresidential building as a whole fell 6.3% to a $583 billion annual rate.
The month’s three largest nonresidential starts were still data centers: the $4.6 billion South Valley campus in Silver Springs, Nev., the $4.3 billion Beacon Point project in Robstown, Texas, and the $2 billion Vantage V41 campus in Fredericksburg, Va. So the sector isn’t stalling. It’s lumpy. A few billion-dollar jobs landing one month instead of the next can swing a monthly reading by double digits.
Institutional and nonbuilding starts carried September
Institutional starts rose 16.3%, led by a 38.4% gain in education. Healthcare slipped 3%. Nonbuilding starts climbed 5.5% to a $377 billion rate as highway and bridge work rose 20.8% and utility starts fell 4.1%.
“These sectors provided a counterweight to weaker commercial and single-family starts,” said Sarah Martin, Dodge’s director of economic research.
Residential barely moved, down 0.3%, but the split underneath it matters. Single-family starts fell 7.4% while multifamily rose 11.3%, helped by an $820 million Four Seasons condo tower in Austin. That runs against the Census numbers that showed apartment starts down 25.9% from a year earlier. The two series measure different things: Dodge tracks the dollar value of projects at groundbreaking month over month, so one tower can carry the multifamily line.
Year-to-date construction starts still look strong
Through nine months, total starts are up 14.3% from 2025. Nonresidential is up 23.7% and nonbuilding is up 18.4%, while residential is down 1.7%. Electric power and utility starts are up 70.1% year to date. Commercial and industrial starts combined are up 46.3%, and institutional work is down 1.8%.
Regionally, starts fell 20% in the South Central states and 13% in the Midwest. The West jumped 33%.
The year-to-date figures flatter the trend. Two straight monthly declines, the second one led by commercial work, suggest the data center and factory wave that inflated 2026 is now arriving in fewer, bigger pieces. For contractors outside those sectors, September’s better signal is the public work: education starts rose 38.4% and highway and bridge starts rose 20.8% in a single month.