The value of construction starts, not seasonally adjusted, soared 13 percent year-over-year (y/y) in May but was down 0.4 percent year-to-date (YTD) in the first five months of 2025 compared to 2024, according to a ConstructConnect report. Nonresidential building starts climbed 36 percent y/y and 6.6 percent YTD, with commercial down 1.8 percent YTD, institutional down 3.6 percent, but industrial (manufacturing) up 54 percent.
According to ConstructConnect, the biggest event boosting this month’s results was the groundbreaking of Taiwan Semiconductor Manufacturing Company’s $25 billion chip plant in Phoenix, which accounts for almost half of all nonresidential building starts. Civil starts rose 9.1 percent y/y and 7.2 percent YTD. Residential starts slumped 16.5 percent y/y and 15 percent YTD, with single-family down 12 percent YTD and multifamily down 20 percent.
The firm reported on June 3 that its Project Stress Index composite increased 11 percent from April to May. This rise was fueled by a 30 percent increase in abandonment activity, while bid-date delays decreased 1.9 percent and on-hold activity saw negligible change. ConstructConnect reports since the end of 2024, abandonment activity has jumped 66.5 percent, bid-date delays increased 4.3 percent, and on-hold activity declined 18.5 percent. While bid-date delays and on-hold activity are still within historic levels, abandonment activity has climbed to its highest level since early February 2024, with the level of private sector abandonments up 92 percent y/y. Current abandonment activity is at its highest level in recorded history, which began in mid-2019. While public abandonment activity is also elevated at this time, it remains within its historic range.
The Project Stress Index composite represents an equal-weight measure of the seasonally adjusted level of preconstruction projects that have experienced a delayed bid date, been placed on hold, or abandoned in the last 30 days. It only monitors nonresidential and multifamily projects in their preconstruction phases, thus excluding any single-family construction.
