The U.S. construction industry experienced a major boost in May as large-scale infrastructure, utility, manufacturing, and data center projects pushed groundbreaking activity sharply higher across the country.
According to newly released industry data from Dodge Construction Network, total construction starts climbed 34.1% in May compared to the previous month, reaching a seasonally adjusted annual rate of $1.78 trillion.
The increase highlights the continued influence of major construction investments, particularly in sectors attracting significant public and private funding.
Megaprojects Continue to Shape Market Activity
Industry analysts noted that a relatively small number of large projects played a significant role in driving overall construction growth during the month.
Sarah Martin, Director of Economic Research at Dodge Construction Network, said activity was largely concentrated in sectors that have consistently generated strong demand over the past year.
Major developments in healthcare, manufacturing, utilities, and data centers were among the primary contributors to May’s increase in construction starts. However, other areas of the market continued to face challenges, particularly warehouse, residential, and some institutional construction segments.
Manufacturing Sector Posts Strong Recovery
Manufacturing construction recorded one of the strongest performances during May, more than doubling compared to the previous month.
A key contributor was the groundbreaking of a new $5 billion electric vehicle manufacturing facility planned by Rivian in Georgia. The project ranks among the largest manufacturing investments announced this year and reflects continued growth in domestic EV production.
Healthcare construction also delivered strong results, helping boost institutional building activity during the month.
Data Centers Support Commercial Construction
While overall commercial construction activity remained relatively stable, data center and office-related projects provided important support to the sector.
Growing demand for artificial intelligence, cloud computing, and digital infrastructure continues to fuel investment in large-scale data center developments nationwide.
At the same time, several commercial property categories experienced declines. Hotel construction and warehouse development both recorded notable decreases compared to April levels, reflecting changing market conditions and shifting investment priorities.
Infrastructure Construction Leads Monthly Growth
The strongest gains in May came from nonbuilding construction projects.
Highway and bridge construction saw a significant increase as transportation agencies moved forward with major infrastructure improvements. Utility construction also surged, supported by growing investments in electric power generation and transmission networks.
Year-to-date figures show continued momentum for infrastructure projects, with utility construction leading overall growth.
Industry experts say federal infrastructure funding and expanding energy demands are helping sustain activity in these sectors despite economic uncertainty elsewhere.
Residential Market Remains Under Pressure
Unlike other areas of construction, residential building activity moved lower during May.
Both single-family and multifamily housing starts declined, reflecting ongoing affordability concerns, financing challenges, and slower housing market conditions in many regions.
Although residential construction remains a major component of the industry, recent growth has been overshadowed by the rapid expansion occurring in infrastructure, manufacturing, and technology-related projects.
Largest Construction Projects Announced in May
Several multibillion-dollar projects helped drive overall construction activity during the month, including:
- A $13.5 billion liquefied natural gas export facility in Louisiana.
- A $5 billion electric vehicle manufacturing plant in Georgia.
- A $4.2 billion highway expansion project in Georgia.
- A $4.1 billion bridge corridor improvement project connecting Kentucky and Ohio.
- A $3 billion data center development in Alabama.
- A $2.8 billion commercial tower project in New York City.
Additional residential, healthcare, and mixed-use developments also contributed hundreds of millions of dollars in new construction activity.
Outlook for the Construction Industry
While headline construction figures remain strong, industry observers caution that growth continues to be concentrated within a handful of high-performing sectors.
Infrastructure improvements, utility investments, advanced manufacturing facilities, and data centers are expected to remain key drivers throughout the remainder of 2026. Meanwhile, residential construction and certain commercial property categories may continue to face pressure from economic and financing conditions.
For now, the surge in megaprojects is helping keep construction activity elevated and providing significant opportunities for contractors, suppliers, and skilled labor across the country.
