Construction Starts Surge 21.1% in October on Mega-Project Activity

Megaprojects Drive Growth While Underlying Market Activity Remains Moderate

Total construction starts surged 21.1% in October 2025 to a seasonally adjusted annual rate of $1.53 trillion, according to the Dodge Construction Network. The dramatic month-over-month increase was driven primarily by ten projects valued at $1 billion or more breaking ground, predominantly in data center, manufacturing, and liquefied natural gas construction sectors. However, when measured by square footage rather than dollar value, the underlying market shows more moderate growth patterns.

October 2025 Construction Starts Breakdown

According to the Dodge Construction Network analysis released in November 2025:

• Nonresidential Building Starts: +17.9% to $561 billion
• Residential Building Starts: -15.4% to $323 billion
• Nonbuilding Construction Starts: +59.4% to $645 billion
• Total Construction Starts: +21.1% to $1,528 billion (annualized rate)

The significant growth in nonbuilding construction—which includes utilities, infrastructure, and major engineering projects—reflects the influence of large-scale megaprojects. Utilities category specifically surged 384.5%, while manufacturing starts rebounded sharply with a +107.2% increase.

Megaprojects Leading Growth Trajectory

Ten projects valued at $1 billion or more broke ground in October, marking significant construction investment concentration. Major projects breaking ground included:

• Meta Hyperion Data Center – Richland, Louisiana – $7.5 billion
• LA Convention Center Expansion – Los Angeles, California – $1.9 billion
• Eli Lilly Manufacturing Facility – Lebanon, Indiana – $1.7 billion

These projects demonstrate continued investment concentration in high-tech infrastructure, particularly data center development. The Meta Hyperion project alone, at $7.5 billion, represents a massive commitment to artificial intelligence and computing infrastructure. This investment category—offices and data centers—grew 45.5% in October.

The Square Footage Perspective: A Different Story

Sarah Martin, Associate Director of Forecasting at Dodge Construction Network, emphasized an important caveat: "Growth in construction starts continued to be propped up by high-value megaproject activity last month. Specifically, ten projects valued at $1 billion and over broke ground, largely within data center, manufacturing and LNG construction. Outside of these high-tech buildings, however, growth appears more moderate. In square footage terms, for example, nonresidential and residential starts declined by 4.3% over the month and are down 5.4% year-to-date through October."

This observation reveals a critical distinction: while the dollar value of projects is surging due to expensive megaprojects, the actual volume of construction activity—measured in square feet—is declining. This pattern suggests that the construction market is dominated by a relatively small number of large, expensive projects rather than a broad-based increase in building activity across all sectors.

Sector Performance: Winners and Losers

Strong Growth Sectors (October 2025)

• Utilities: +384.5% – Infrastructure and energy projects
• Manufacturing: +107.2% – Industrial facility construction rebound
• Offices & Data Centers: +45.5% – Megaproject-driven growth
• Miscellaneous Nonbuilding: +10.1% – Steady expansion continues

Declining Sectors (October 2025)

• Multifamily Housing: -38.5% – Sharp pullback after recent strength
• Highway & Bridge: -23.7% – Transportation infrastructure decline
• Education Buildings: -20.8% – Institutional subsector weakness
• Parking Garages: -46.1% – Continued commercial real estate pressure

The decline in multifamily housing starts is particularly significant, dropping 38.5% in October. This suggests cooling demand in residential real estate development, a contrast to strong commercial and industrial investment. Highway and bridge infrastructure also declined, potentially indicating project timing or funding constraints in traditional infrastructure spending.

Year-to-Date Performance Through October 2025

While October showed strong month-over-month growth, year-to-date performance presents a more balanced picture:

• Total Construction Starts (10 months 2025): $1,039 billion vs. $981 billion (2024) = +5.9% growth
• Nonresidential Building: +5.6%
• Residential Building: -5.1%
• Nonbuilding Construction: +19.8%

Year-to-date results show solid growth momentum in nonbuilding construction, which is driving overall industry expansion. However, residential building starts remain down 5.1% compared to 2024, indicating sustained weakness in housing markets.

Regional Performance Analysis

Geographic variations in construction activity are significant:

• South Central Region: +84.9% (month-over-month) – Strong growth, driven by megaprojects in Louisiana and Texas
• Midwest: +18.8% – Moderate growth, including Eli Lilly project in Indiana
• South Atlantic: +8.7% – Steady, modest growth
• West: +1.1% – Minimal month-over-month change despite LA Convention Center project
• Northeast: -40.1% – Significant decline month-over-month, suggesting project timing factors

The Northeast region's 40.1% decline is notable, particularly for contractors in the Rochester, Buffalo, and other upstate New York markets. This regional weakness may reflect seasonal construction timing, delayed project starts, or shifts in investment patterns. However, New York State's ongoing infrastructure investments—including Rochester's school modernization program and regional utility system upgrades—may not yet be fully reflected in Dodge Construction Network data.

12-Month Trailing Performance (October 2024 vs. October 2025)

Over the 12-month period ending October 2025:

• Total Construction: +8.1% compared to 12-month period ending October 2024
• Nonresidential Building: +7.5%
• Residential Building: -3.1%
• Nonbuilding Construction: +22.9%

The 12-month trend shows sustained momentum in nonbuilding construction growth, with nonbuilding starts up 22.9% year-over-year. This strength reflects ongoing investments in infrastructure, manufacturing facilities, and specialized industrial projects. However, residential weakness persists.

What This Means for Construction Contractors and Professionals

Opportunities

• Data center and technology infrastructure projects represent the fastest-growing segment, creating opportunities for specialized contractors
• Manufacturing and industrial projects are experiencing strong growth, supporting fabrication, mechanical, and electrical contractors
• Infrastructure and utility work remains robust, with utilities investment up 384.5% in October
• Regional variation suggests specific geographic opportunities – South Central growth is strong while Northeast remains volatile

Challenges

• Residential market weakness (down 5.1% YTD) indicates limited opportunities in apartment and housing construction
• Square footage decline suggests smaller projects are being displaced, disadvantaging mid-size contractors
• Megaproject concentration means most growth benefits large firms with capacity for billion-dollar projects
• Northeast weakness requires careful market positioning for contractors in upstate New York markets

Implications for Local Markets: Rochester and Upstate New York

While the Northeast region experienced a -40.1% month-over-month decline in October, this reflects broader seasonal and timing factors rather than fundamental market weakness. Rochester and upstate New York markets are positioned for growth based on:

• $1+ billion school modernization approved
• Infrastructure investment in water systems and utilities
• Commercial real estate development opportunities
• Manufacturing and industrial facility potential in Western New York

The Dodge Construction Network data shows that most megaproject growth is concentrated in the South Central region (Louisiana, Texas, Indiana). For upstate New York contractors, opportunities will focus on these state-approved initiatives rather than megaprojects.

Industry Outlook

Construction professionals should anticipate:

• Continued strength in data center and technology infrastructure through 2026
• Ongoing manufacturing sector investment as industrial facility development continues
• Persistent residential market challenges requiring adaptation
• Regional variation requiring market-specific strategies
• Consolidation favoring larger firms capable of handling megaprojects and complex coordination

For contractors positioned in specialized sectors (HVAC, electrical, mechanical systems, project management), the current market offers opportunities despite overall square footage declines. The key is maintaining specialization in high-value project types and developing relationships with general contractors managing major initiatives.

Source: Dodge Construction Network data analysis, reported in Inside Lighting, "Surge in Construction Starts Driven by Megaprojects," November 28, 2025. Data reflects seasonally adjusted annual rates of construction starts through October 2025.