The summer of 2024 has witnessed some of the most significant construction groundbreakings across the United States, despite a general slowdown in the sector. These projects highlight ongoing investment in key areas like technology, residential development, and manufacturing. Here’s a closer look at the standout groundbreakings this season.
Major Projects Kick-Off
Among the notable projects that began this summer is the $1.5 billion QTS Albany data center in New Albany, Ohio. This massive data center is part of a broader trend of tech giants investing in U.S. manufacturing and infrastructure, with companies like Amazon and Google also establishing data centers in the area.
In Florida, Dezer Development broke ground on the Bentley Residences in Sunny Isles Beach, a $1 billion project that will become the tallest U.S. oceanfront building. The 63-story skyscraper will feature 216 luxury units and amenities including a unique car elevator system.
Significant Declines Amidst High-Profile Projects
Despite these high-profile projects, overall construction starts have seen a significant decline. According to Construction Dive and Dodge Construction Network, total construction starts plummeted 19% in June to a seasonally adjusted annual rate of $1 trillion, marking a sharp decline after a robust spring. This drop was largely driven by a 46% decrease in nonbuilding starts, which include utility, gas, highway, street, and bridge projects.
While the overall market remains sluggish due to high interest rates, the steady Dodge Momentum Index suggests that owners and developers are still cautiously optimistic about future conditions. This suggests that many projects are being delayed rather than canceled, awaiting more favorable economic conditions.
Top Groundbreakings in June
Here are some of the largest U.S. projects that broke ground in June or July:
Dominion Energy’s Coastal Offshore Wind Project: $10 billion, Virginia Beach
QTS Albany Data Center: $1.5 billion, New Albany, Ohio
Bentley Residences: $1 billion, Sunny Isles Beach, Florida
Cipriani Residences: $600 million, Miami, Florida
First Solar Manufacturing Plant: $550 million, New Iberia, Louisiana
TGH Taneja Tower Surgical Building: $520 million, Tampa, Florida
Airo Ivy City Yard Rail Improvements: $510 million, Washington, D.C.
Marketplace Apartments: $434 million, Irvine, California
Cadillac El Dorado Solar Facility: $400 million, Callahan County, Texas
Belmont Park Racing Facility Replacement: $400 million, Elmont, New York
Year-to-Date Trends
For the first half of 2024, total construction starts are up 7%, with nonresidential starts increasing by 1% and residential and nonbuilding starts rising by 14% and 8% respectively. However, nonresidential building starts dropped 13% in June, primarily due to a 34% decrease in manufacturing starts and a 19% decline in institutional projects like healthcare facilities. Despite this, year-to-date institutional starts are still up 11% compared to the same period in 2023.
Residential starts, however, have shown resilience, increasing by 9% in June. Multifamily starts surged by 23%, while single-family groundbreakings rose by 4%. Year-to-date, total residential starts have gained 14%.
Looking Ahead
The construction industry's future looks cautiously optimistic. The recent groundbreakings of major projects reflect ongoing investment and confidence in key sectors. As interest rates stabilize and potentially decrease in 2024, we may see a resurgence in construction activity, unlocking the potential for delayed projects to move forward. At Paragon, we remain committed to navigating these economic shifts, providing the expertise and adaptability needed to thrive in an evolving market.
Stay tuned for more updates on groundbreaking projects and trends shaping the construction industry.
Sources: https://www.constructiondive.com/news/9-largest-commercial-construction-starts-june-2024/722209/, https://www.viewpoint.com/blog/construction-industry-trends-july-2024-roundup
