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Commercial construction starts fell 18.4% month over month in September 2026, according to Dodge Construction Network. That sharp drop did not mean U.S. construction activity fell by 18% overall: total starts declined 1.5% to a seasonally adjusted annual rate of $1.33 trillion because institutional and nonbuilding work increased. The monthly result is a volatile snapshot of projects breaking ground, while the year-to-date figures through September still show a substantially stronger construction market than a year earlier.
Why did commercial groundbreakings plunge 18% in September?
Dodge’s 18.4% decline compares the dollar value of commercial projects that started in September with the value that started in August. It is not a count of canceled projects, and it does not establish that developers abandoned a particular building type. A few very large projects can materially change a single month’s total, which is why the monthly percentage should be read separately from the longer-term trend.
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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteCommercial work is one part of nonresidential building. In September, nonresidential building starts overall fell 6.3%, while the commercial segment dropped more sharply. Residential starts slipped 0.3%, and nonbuilding starts rose 5.5%, limiting the effect on the all-sector total.
Which commercial categories fell?
The largest reported declines among Dodge’s selected commercial categories were hotels, down 46.3%; the combined offices and data centers category, down 21.4%; and manufacturing, down 21.0% month over month. Those percentages describe changes in the value of starts in each category, not the operating performance of existing properties or the number of construction permits issued.
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Not every commercial category weakened. Parking-garage starts increased 33.9%, and commercial warehouses edged up 0.8%. The mixed results show why a single commercial headline cannot be used to infer that every building type experienced the same conditions.
Did data center construction stop in September?
No. The category decline and continued starts of very large data-center projects can occur at the same time. Dodge listed three data center projects among September’s largest nonresidential starts: the $4.6 billion South Valley project in Silver Springs, Nevada; the $4.3 billion Beacon Point project in Robstown, Texas; and the $2.0 billion Vantage V41 campus in Fredericksburg, Virginia.
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Dodge combines offices and data centers in the category that fell 21.4%, and its public release does not provide enough detail to determine how much of that movement came from either type of project. The presence of those three groundbreakings therefore argues against treating the monthly category change as proof of cancellations or a collapse in data-center demand.
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What happened to total construction starts in September 2026?
Total U.S. construction starts decreased 1.5% in September, to a seasonally adjusted annual rate of $1.33 trillion. Sarah Martin, Dodge Construction Network’s director of economic research, said that gains in institutional and nonbuilding construction cushioned weaker commercial and single-family starts.
| Sector or measure | September 2026 change from August |
|---|---|
| Total construction starts | Down 1.5%; $1.33 trillion seasonally adjusted annual rate |
| Commercial starts | Down 18.4% |
| Nonresidential building starts | Down 6.3% |
| Residential starts | Down 0.3% |
| Nonbuilding starts | Up 5.5% |
| Institutional starts | Up 16.3% |
| Education starts | Up 38.4% |
| Highway and bridge starts | Up 20.8% |
Institutional construction includes facilities such as schools and other public-serving buildings. Its 16.3% increase, led by a 38.4% rise in education starts, provided a substantial counterweight to commercial weakness. Highway and bridge starts rose 20.8%, helping lift the broader nonbuilding category.
Is the September decline the direction of the 2026 construction market?
Not by itself. Through the first nine months of 2026, total starts were up 14.3% from the comparable period of 2025. Nonresidential starts were up 23.7% and nonbuilding starts were up 18.4%, while residential starts were down 1.7%.
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| Measure through September 2026 | Change from January–September 2025 |
|---|---|
| Total construction starts | Up 14.3% |
| Nonresidential starts | Up 23.7% |
| Nonbuilding starts | Up 18.4% |
| Residential starts | Down 1.7% |
The two time frames answer different questions. The September comparison shows what changed between two adjacent months; the year-to-date comparison measures the cumulative value of projects started during the first three quarters. A weak September can coexist with a year that remains well ahead of 2025.
Where did starts rise or fall geographically?
Regional performance was uneven in September. Starts fell 20% in South Central, 13% in the Midwest and 1% in the Northeast. They increased 33% in the West and 7% in the South Atlantic.
These regional percentages reinforce the need to avoid treating the national commercial figure as a uniform local trend. A contractor, supplier or developer should compare the national release with the mix of projects and sectors in its own market before changing staffing, bidding or capital plans.
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What should contractors take from the report?
- Separate monthly volatility from backlog planning. The 18.4% commercial drop is a groundbreakings measure for one month, not a forecast of completed work or a direct measure of cancellations.
- Watch institutional and infrastructure pipelines. Education, highway and bridge activity increased in September and helped offset commercial weakness.
- Track categories individually. Hotels and manufacturing declined sharply, while parking garages and warehouses grew, so an undifferentiated “commercial” assumption can mislead.
- Keep the year-to-date context in view. Total starts remained 14.3% above the first nine months of 2025, with especially strong cumulative gains in nonresidential and nonbuilding work.
- Use project-level evidence carefully. Three multibillion-dollar data center groundbreakings demonstrate that a category’s monthly decline does not mean every major project stopped.
Dodge’s public release identifies the category movements but does not establish specific economic or project-level causes for the declines in offices and data centers or manufacturing. Any explanation beyond those reported movements would be speculation.
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Does an 18.4% drop mean 18.4% of commercial projects were canceled?
No. Dodge’s measure is the dollar value of projects starting in September compared with August. It does not count cancellations, and the release does not identify which individual projects were delayed, resized or removed.
How is the $1.33 trillion figure calculated?
It is a seasonally adjusted annual rate: September’s construction-start pace is expressed as if it continued for a full year. It is not the amount of construction physically completed or the cash spent during September.
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Why can institutional starts rise while nonresidential building starts fall?
Institutional work is a component within the broader nonresidential universe, and different subgroups can move in opposite directions. In September, institutional starts increased 16.3% even as total nonresidential building starts declined 6.3%.
Which region had the strongest September increase?
The West recorded the largest regional gain, with starts up 33% from August. South Central had the steepest decline, down 20%.
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