The value of construction starts, not seasonally adjusted, soared 13% year-over-year (y/y) in May but was down 0.4% year-to-date (YTD) in the first five months of 2025 compared to January-May 2024, ConstructConnect reported on Thursday. Nonresidential building starts climbed 36% y/y and 6.6% YTD, with commercial down 1.8% YTD, institutional down 3.6%, but industrial (manufacturing) up 54%. “The single most important event boosting this month’s results was the groundbreaking of Taiwan Semiconductor Manufacturing Company’s $25 billion chip plant in Phoenix, [accounting for] almost half” of all nonresidential building starts. Civil starts rose 9.1% y/y and 7.2% YTD. Residential starts slumped 16.5% y/y and 15% YTD, with single-family down 12% YTD and multifamily down 20%.
The firm reported on June 3 that its Project Stress Index composite increased 11% from April to May. “This rise was fueled by a 30% increase in abandonment activity, while bid-date delays decreased 1.9% and on-hold activity saw negligible change. Since year-end 2024, we have seen abandonment activity rise 66.5%, bid-date delays increase 4.3%, and on-hold activity declined 18.5%. While bid-date delays and on-hold activity are still within historic norms, abandonment activity has climbed to its highest level since early February 2024….The level of private sector abandonments accelerated in May, rising sharply in April. 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 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. The [index] only monitors nonresidential and multifamily projects in their preconstruction phases, thus excluding any single-family…construction.”
Additional steel producers announced price hikes, following the June 4 increase from 25% to 50% in the tariff on imported steel and aluminum. A reader forwarded announcements on Monday by WMC of an increase of “$50.00/ton on all Building Mesh products effective with orders placed after June 23” and on Wednesday by Peninsula Steel of “a $50/ton price increase, effective immediately, for all new orders” from its Plant City, Florida, location. Readers are invited to send information about project timing, materials price changes, and supply chains to ken.simonson@agc.org.
“Bristol Myers Squibb, Eli Lilly, Roche and others have promised to invest more than $250 billion in domestic pharmaceutical manufacturing, jobs and other functions as tariffs targeting their products loom,” the Wall Street Journal reported on Wednesday. But “makers of generics—cheaper copies that make up 90% of Americans’ prescription medications—say further domestic investment is too risky in such a low-margin and unpredictable business, unless the government helps to steady the sector. Drugmakers want more clarity from the Trump administration on the potential pharmaceutical tariffs, which some companies warn could lead them to close U.S. plants altogether.”
The boom in electric vehicle (EV) battery plant construction is over. “Companies went from investing about $1 billion per quarter in 2022 to $11 billion per quarter in 2024. Most of that battery investment went to red states, including in the South’s ‘Battery Belt,’ where manufacturers were drawn to inexpensive land and a nonunionized workforce,” the Washington Post reported today, citing a new report by Rhodium Group. In contrast, “In the first three months of 2025, companies canceled $6 billion in battery manufacturing—a record. EV sales have slowed. Meanwhile, Republicans are planning to phase out the tax credit for producing battery components and eliminate the consumer tax credit for EVs.”
The Architecture Billings Index (ABI) rose to 47.2 in May, seasonally adjusted, from 43.2 in April, the American Institute of Architects posted on Wednesday. The index is “a leading economic indicator of construction activity, providing an approximately 9- to 12-month glimpse into the future of nonresidential construction spending activity.” The ABI is derived from the share of responding architecture firms that report a gain in billings compared to the previous month less the share reporting a decline in billings, presented on a 0-to-100 scale, with. Any score below 50.0 indicates decreasing business conditions. Since September 2022, billings have declined in all but three of the last 32 months.
Housing starts (units) in May declined 9.8% for the month at a seasonally adjusted annual rate and 1.5% for the first five months of 2025 YTD compared to January-May 2024, the Census Bureau reported on Wednesday. Single-family starts edged up 0.4% for the month but slumped 7.1% YTD. Multifamily (five or more units) starts were plunged 30% from April but rose 15% YTD. Residential permits decreased 2.0% for the month and 4.7% YTD. Single-family permits declined 2.7% and 5.9%, respectively. Multifamily permits rose 1.4% from April but were down 3.2% YTD.
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