US Construction Sector NAICS 23

Dec 4, 2025 - Megaprojects Boost Construction Starts

• Megaprojects drove substantial gains for the total value of construction starts in October compared to September, according to Dodge Construction Network. Nonbuilding construction starts jumped 59.4% in October, led by a 384.5% surge in utilities and an 18.6% rise in environmental public works. Highway and bridge starts were down 23.7%. Nonresidential building construction starts increased 17.9% in October compared to the previous month, amid a 19.5% rise in commercial starts, led by data centers (+45.5%) and retail stores (+15.1%). Institutional starts grew 3.7% due to project categories other than education and healthcare, which saw starts fall 20.8% and 2.7%, respectively. Residential starts dropped 15.4% in October, with single-family starts down 2.2% and multifamily starts down 38.5%. Dodge said 10 projects valued at $1 billion or more broke ground in October, primarily in data centers, manufacturing, and liquefied natural gas (LNG) facilities.
• America’s largest homebuilders are struggling to sell new homes despite offering 4% mortgages and deep discounts, according to The Wall Street Journal. D.R. Horton and Lennar have slashed prices and added incentives, but demand remains weak, pushing unsold inventory to levels last seen in 2009. Builders are slowing construction, with D.R. Horton cutting starts by 21% year over year for the three-month period through September. Regional gluts in Texas, Florida, Southern California, and Washington, DC reflect rising resale competition, fewer foreign buyers, and economic uncertainty. Investor activity is at a 15-year low, with institutional buyers demanding steep discounts that builders won’t meet. New homes, often located in less desirable areas and targeted at first-time buyers, are more challenging to sell.

• Construction firms that work on civil infrastructure projects are holding steady as they manage uncertainties, including waning backlog growth and stagnant margins, according to FMI’s fourth-quarter Civil Infrastructure Construction Index (CICI) survey. The CICI reading for the third quarter was 50.6 compared to 50.8 in Q3 2025 – on a 100-point scale. Any CICI reading above 50 indicates that more civil infrastructure contractors see conditions as good than poor. About half of civil infrastructure contractors reported that their backlogs in Q4 met or exceeded their targets, although most reported that public projects make up a growing share of overall backlogs, as private-sector projects face greater uncertainty. Contractors expect backlog growth to slow over the next few quarters as more firms vie for a narrower set of public projects. Contractor margins remained steady but flat in Q4 2025 as bid competition and rising cost pressures eroded pricing power.
• Home remodeling spending is expected to remain stable for the rest of this year and through mid-2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in October by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 1.9% to $511 billion in the fourth quarter of 2025, compared to Q4 2024. In the first quarter of 2026, remodeling spending will reach $524 billion, up 2.4% from Q1 2025. Spending will then moderate to $519 billion in Q2 2026, up 2.1% from Q2 2025. In the third quarter of 2026, year-over-year spending is forecast to rise 1.9% to $517 billion. While solid remodeling permitting activity and gradually improving single-family home sales will support remodeling activity, potential headwinds include continued weakness of housing starts and economic uncertainty.