Construction kick off activity pulled back in January as fewer commercial projects broke ground, though infrastructure work kept builders busy with new highway, bridge and energy projects.

Total construction starts fell 6% in January to a seasonally adjusted annual rate of $1.1 trillion, according to Dodge Construction Network.

Nonresidential building starts, such as office, hotel and healthcare facilities, dropped 18% in January, while residential starts dipped 1%, according to the report. Nonbuilding starts, such as highways, bridges and utility plants, ticked up 4% during the first month of the year, according to Dodge.

“After robust data center starts in November and December, total office starts fell back in January to more historically typical levels and drove a sizable piece of the month-to-month decline,” said Sarah Martin, associate director of forecasting at Dodge Construction Network. “However, most nonresidential sectors saw weakness over the month.”

Labor shortages and high material costs continue to weigh on construction, while uncertainty around tariffs and immigration policies could further complicate project timelines, said Martin. She added projects are likely to move through the planning queue slowly, at least until the Federal Reserve resumes expected cutting of rates in the back half of the year.

Here are the nine largest U.S. projects to break ground in January:

• The $5 billion Children’s Health & UTSW New Pediatric campus in Dallas.
• The $1.1 billion Sequoia solar farm in Callahan County, Texas.
• The $696 million NHHIP Segment 3B-2 road widening project in Houston.
• The $630 million Beaver Stadium renovations in University Park, Pennsylvania.
• The $470 million Ulana Ward Village Tower building in Honolulu.
• The $400 million JEM residences at Miami World Center in Miami.
• The $333 million Mid-Hudson forensic psychiatric hospital in New Hampton, New York. 
• The $307 million Timber Mill high school and athletic field in Conroe, Texas.
• The $279 million Alafia affordable apartments in Spring Creek, New York.

Starts’ growth

The decline in nonresidential activity stemmed largely from a sharp pullback in commercial projects, which dropped 41% in January as office and hotel construction weakened, according to Dodge. Manufacturing groundbreakings, long an area of strength in 2024, also fell 16% during the month. On a year-over-year basis, commercial starts are down 18%.

Infrastructure-related construction helped cushion the broader decline in January, as highway and bridge starts climbed 14% in January, according to Dodge.

Utility and gas projects ticked up 1% in January, though environmental public works dropped 14% during the first month of the year. Compared to January 2024, nonbuilding construction posted a 17% gain, led by an 84% surge in utility and gas projects and a 10% increase in highway and bridge groundbreakings, according to the report.

Multifamily construction provided some stability on the residential side, ticking up 2% in January, according to Dodge. Single-family starts, on the other hand, declined 2% in January. Year-over-year, single-family groundbreakings remained up 6%, though multifamily projects dropped 15% over the past year.