In addition, the Architecture Billings Index, a measure of future construction work, posted its lowest score since December 2020.

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Dive Insight:

While the construction starts report measures projects that have broken ground, the American Institute of Architects’ Architecture Billings Index tracks building design work for jobs to come. That index, which leads actual construction by nine to 12 months, posted its lowest score since December 2020.

That suggests decreasing business conditions, said Kermit Baker, AIA chief economist, in a release sent to Construction Dive.

“The September ABI score reflects a marked downturn in business conditions at architecture firms, with the sharpest decline observed since the peak of the pandemic,” said Baker. “While more firms are reporting a decrease in billings, the report also shows the hesitance among clients to commit to new projects.”

Manufacturing slides, sends nonresidential starts down

Nonresidential starts, which include commercial, institutional and manufacturing projects, dropped 4% in September to a seasonally adjusted annual rate of $459 billion. Manufacturing activity, which has propped up the nonresidential category this year, ticked down 13%, according to the Dodge report.

Meanwhile, institutional starts, which include education and healthcare projects, also fell 8% in September.

Nevertheless, strong activity around data center projects, which fall under the office sector in the Dodge database, as well as retail work, pushed overall commercial starts to jump 6% in September.

On a year-to-date basis through September, total nonresidential starts remained 7% lower than at the same point in 2022, according to the report.

The largest nonresidential projects to break ground in September included:

Nonbuilding starts falls again

After a 14% drop in Augustnonbuilding construction starts, which consists of highway, bridge, gas plant and environmental public projects, continued its slide in September, posting a 9% decline.

Highway and bridge starts dropped 15% in September, while environmental public works fell 29%, according to the report. On a positive note, utility and gas plant construction starts gained 14% in September.

Year-to-date, however, nonbuilding construction starts have shown resilience. The category remains up 25% compared to the same timeframe a year ago, led by a 58% jump in utility and gas plant construction and a 13% gain in highway and bridge starts.

The largest nonbuilding projects to break ground in September were:

Residential building weakens

Residential building starts followed up on its 1% decline in August with a further 6% drop in September. Single family starts gained 1%, but multifamily starts declined 17%, according to Dodge.

On a year-to-date basis through September, total residential starts dropped 17%. During that span, single family and multifamily starts dropped 19% and 12%, respectively.

The largest multifamily structures to break ground in September included: