Dive Brief:
- The value of commercial and multifamily construction starts rose 24% in the first half of 2022 compared to the same period last year in the country’s top 20 metropolitan areas, according to Dodge Construction Network. The top three markets are New York City, Dallas and Washington, D.C.
- In the first half of the year commercial starts climbed 14% to $70 billion, while multifamily starts grew 24% to $69.6 billion.
- The gains are largely driven by rising demand for apartments and condos, according to the report, and a budding recovery in the commercial sector has also created more broad-based improvements around the country.
Dive Insight:
Despite ongoing challenges like shortages of key materials and labor, rising prices and higher interest rates, the pandemic recovery continues for the construction industry. Growth morphed this year beyond warehouses and single-family housing to include improvement in other commercial sectors as well, according to the Dodge release.
Nationally, combined multifamily and commercial starts increased 18% in the first half of 2022 to $139.5 billion. Several areas however — Seattle; Los Angeles; Philadelphia; Boston; Nashville, Tennessee; Kansas City, Missouri; Chicago and Minneapolis — posted a decline. San Jose, California, saw the biggest percentage increase at 186% year-over-year growth.
Here are the top 10 metropolitan areas for construction and multifamily starts:
| City | % change | Total value |
|---|---|---|
| New York City area | Up 20% | $15.3 billion |
| Dallas | Up 72% | $8.1 billion |
| Washington, D.C., area | Up 35% | $5.5 billion |
| Miami | Up 31% | $4.5 billion |
| Austin, Texas | Up 70% | $4.3 billion |
| Phoenix | Up 53% | $4.2 billion |
| Atlanta | Up 68% | $4.2 billion |
| Seattle | Down 10% | $3.5 billion |
| Los Angeles | Down 14% | $3.4 billion |
| Philadelphia | Down 3% | $3.2 billion |
The company’s chief economist said the construction sector is at a crossroads.
“Even though the level of projects currently in planning portends a bright second half to the year, the Federal Reserve’s fight against inflation has taken a toll on the economy and raised concerns that a recession could occur,” said Richard Branch, chief economist for Dodge, in the release. “As a result, construction starts are likely to move sideways over the second half of the year and potentially stall as the calendar shifts into 2023.”
In the top 10 metro areas, commercial and multifamily starts rose a combined 28% in the first six months of 2022.
Included in Dodge’s ranking are office buildings, stores, hotels, warehouses, commercial garages and multifamily housing; not covered are builds like schools, hospitals, convention centers, factories, single family housing, public works and electric utilities.
