U.S. construction starts jumped 25.6% in July to a seasonally adjusted annual rate of $1.79 trillion, according to Dodge Construction Network, a rebound driven almost entirely by a handful of enormous data center and semiconductor projects breaking ground in a single month.
The headline number reverses a steep June decline, but the composition matters more than the total. Nonresidential building starts surged 57.7% month over month. Residential starts rose 4.9%. Nonbuilding starts, which cover infrastructure and energy, edged up 2.2%.
Eric Gaus, chief economist at Dodge Construction Network, was blunt about what the number does and does not show. “Megaproject driven volatility headlines a disjointed construction market,” he said. “There is strength in pockets, multifamily within residential, data centers within commercial, energy within non-building, but also verticals struggling to stabilize.”
Three projects account for much of the swing
The largest nonresidential projects to break ground in July were extraordinary even by the standards of the current building cycle.
Project Jupiter Data Center Phase 1 in Santa Teresa, N.M., entered construction at $12.8 billion. The Micron Semiconductor Mega-Factory Fab 1 in Clay, N.Y., followed at $12.0 billion. The Amazon STACK Highway 3 Data Center in Benton, La., started at $4.0 billion.
Those three projects alone represent nearly $29 billion in construction value. Because Dodge reports starts at a seasonally adjusted annual rate, single months containing projects of that scale can move the national figure by double digits regardless of what the rest of the industry is doing.
The pattern extended to infrastructure. The largest nonbuilding starts were the California High-Speed Rail Authority’s new track and systems work in Bakersfield, Calif., at $2.4 billion; Project Jupiter Microgrid Phase 1 in Santa Teresa, N.M., at $2.3 billion; and the Transco Southeast Supply Enhancement Pipeline in Chatham, Ga., at $1.5 billion. The microgrid is tied to the same New Mexico data center campus, an increasingly common arrangement as operators build dedicated power alongside computing capacity.
Residential remains the weak category
The largest residential projects to break ground were considerably smaller: NY Vue-Harbor Station South in Bayonne, N.J., at $535 million; ICON Beach Waterfront Condominiums in Hollywood, Fla., at $343 million; and 65 Franklin Mixed Residential in New York at $320 million. All three are multifamily or mixed-use, consistent with Gaus’s observation that multifamily is the pocket of strength inside housing.
Year to date through July, residential starts are down 1.7% while nonresidential starts are up 21.9% and nonbuilding starts are up 29.8%. Total starts are up 16.9% for the year.
The 12-month trailing comparisons tell the same story with more weight behind them: nonbuilding up 32.1% against July 2025, nonresidential up 14.8%, and residential down 2.7%. Total starts are up 14.4% on that basis.
Consistent with other 2026 construction data
Dodge’s July figures line up with a pattern visible across several independent measures this year. RealtyWire reported that nonresidential construction starts hit a one-month record in June on a separate data series, also led by data centers. Census Bureau data showed single-family housing starts falling sharply in July even as permits rose, and total construction spending declined in June as residential building cooled.
The labor data points the same direction. Construction job openings rose 36% year over year in June, driven by nonresidential demand rather than home building.
What it means
The verified fact is a 25.6% monthly increase concentrated in nonresidential building, with three projects worth roughly $29 billion breaking ground.
Dodge’s own chief economist attributes the volatility to megaprojects and describes the market as “disjointed.” That is an attributed interpretation, and it is a cautious one.
RealtyWire’s read is that monthly construction starts have become a poor gauge of industry-wide health precisely because a small number of AI-related projects can dominate the total. A 25.6% rebound sounds like a broad recovery. The year-to-date residential figure — down 1.7% — is the number a homebuilder would recognize. Both are accurate descriptions of the same month.
This does not mean the nonresidential activity is illusory. Those projects employ real workers, consume real materials, and will generate real leasing and power demand. It means the aggregate starts number now describes two different construction economies averaged together.
What to watch
The question for the months ahead is whether nonresidential strength persists once the current wave of announced hyperscale campuses has broken ground, or whether the pipeline thins. Dodge’s Momentum Index, which leads actual starts by roughly a year, has been climbing on data center planning, suggesting the pipeline is not yet empty.
For residential, the more meaningful signal will be whether July’s 4.9% monthly gain in starts extends into August, or whether it proves to be multifamily noise inside a still-contracting single-family market. Dodge will report August starts next month.
