Dodge Construction Network reports a significant increase in construction activity in May, driven by large-scale projects and continued strength in the single-family housing market.

Total construction starts jumped 10% in May compared to April, reaching a seasonally adjusted annual rate of $1.24 trillion, according to Dodge. This marks the second consecutive month of growth and the largest increase of the year.

"The gain in May was driven by a few major projects," said Richard Branch, chief economist for Dodge Construction Network. "However, the data also suggests underlying strength in the market, with single-family starts rising for eight out of the past twelve months despite high mortgage rates."

Key findings of the report:

• Strong growth in specific sectors: utilities, single-family housing, warehouses, and education sectors all saw significant gains in May.
• Single-family housing is a bright spot: single  Single-family starts have risen year-over-year for eight consecutive months, indicating continued demand for new homes despite rising mortgage rates. This growth is expected to stimulate further demand in related sectors like retail, healthcare, and education.
• Large projects boost overall numbers:  The top nine projects breaking ground in May included major undertakings like the multi-billion dollar Port Arthur LNG project in Texas and the Dominion Energy offshore wind project off the coast of Virginia. These large projects significantly impacted the overall construction start figures.
• Nonresidential construction dips slightly: Nonresidential building starts, encompassing office and retail spaces, saw a 2% decrease in May but remain up 3% year-to-date.
• Non-building construction soars: Non-building construction, including public works projects like highways and bridges, saw a significant 49% increase in May due to the two large energy projects. Year-to-date, non-building starts are up 17% compared to 2023.

Overall, the Dodge report paints a picture of a construction industry in growth mode. While some sectors, like nonresidential building, show signs of moderation, the strong performance in single-family housing and large projects suggests continued momentum in the industry.