News Summary
The construction industry in Chicago has faced a sharp decline, with overall construction starts decreasing by 10.2%. Notably, both nonresidential and residential sectors have shown significant decreases, although nonbuilding construction saw growth. The downturn reflects broader economic changes and a shift in project completions, with nonresidential buildings plummeting by 30.1% and residential starts falling by 3.1%. While utilities projects surged, the overall construction landscape appears to be cooling, indicating regional and sector-specific variations.
Chicago Sees Sharp Decline in Construction Starts in July 2025 Across Multiple Sectors
The construction industry in Chicago experienced a notable downturn in July 2025, with both nonresidential and residential projects showing significant decreases, although certain nonbuilding categories saw growth. Overall, construction activity slowed, reflecting broader economic shifts and project completion trends.
Total Construction Starts Decline
In July 2025, the total value of new construction starts in Chicago decreased by 10.2%, reaching a seasonally adjusted annual rate of approximately $1.19 trillion. This marks a reversal from prior gains observed earlier in the year, highlighting a cooling in construction activity across various sectors.
Sector-Specific Performance
Nonresidential Building Starts Plummet
Construction of nonresidential buildings registered a drastic decline of 30.1% during July, resulting in an annual rate of about $443 billion. The decline affected multiple categories within this sector, including institutional and manufacturing projects.
- Notable decreases were seen in manufacturing projects, which shrank by 84.7%.
- Institutional projects decreased by 4.6%, with education construction down by 13.3%.
- Commercial construction started to normalize, reducing by 8.5%, with office projects declining significantly by 33.1%-a trend indicating stabilization at lower levels set earlier in 2024.
Major nonresidential projects that began in July include the UU West Valley Eccles Health Campus in Utah valued at $855 million, the Mercy Hospital Campus in Missouri at $650 million, and the Meta Data Center Campus in Ohio worth $550 million.
Nonbuilding Construction Sees Growth
While other sectors slowed, nonbuilding construction experienced a boost of 20.4%, reaching an annual rate of approximately $395 billion. This growth was driven primarily by utilities and public works projects.
- Utilities projects surged by 127.2% month-over-month.
- Miscellaneous nonbuilding projects increased by 50.0%.
- Public works like highways fell by 2.5%, but environmental public works dropped significantly by 17.7%.
Significant projects initiated in this category included the Empire Wind Offshore Wind Energy Project in New York, the A’s Ballpark in Nevada, and a power transmission line in Oregon.
Residential Construction Shows Mixed Results
Residential starts fell slightly by 3.1% in July, reaching an annual rate of approximately $356 billion. Within residential projects, single-family homes experienced a modest increase of 1.2%, while multifamily starts declined by 9.5%.
- Year-to-date (YTD) residential construction is down by 4.4%.
- Single-family residential starts are down by 10.1%, but multifamily projects increased by 8.3%.
In terms of major projects started in July, the largest multifamily developments included the Rangel Houses Renovation in New York valued at $552 million, and a new apartment tower, the 20 Long Slip Apartment in Jersey City, costing $365 million.
Regional Variations in Construction Starts
Construction activity varied across regions. The Northeast experienced an increase in starts, while declines were observed in the Midwest, West, South Central, and South Atlantic regions. These regional changes reflect differing economic conditions and project pipelines nationwide.
Year-Over-Year Trends and Summary
Over the past 12 months ending in July 2025, total construction starts have grown by 4.1% compared to the previous year. The nonresidential sector led this growth with a 4.6% increase, while residential starts remained relatively flat, decreasing by 0.7%. Nonbuilding projects showed the most notable annual rise, up by 9.3%.
Looking at the year-to-date figures, nonresidential starts are up by 4.3% compared to the same period last year, driven by a 5.5% increase in commercial and industrial projects, and a 3.0% rise in institutional projects.
Expert Analysis and Outlook
While precise projections are uncertain, experts note that the decline in July may offset earlier gains made in the spring and early summer. Overall, the construction industry remains relatively stable with modest growth over the past year, although some sectors, especially manufacturing and institutional projects, are experiencing significant decreases, indicating shifts in investment and development priorities.
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- Construction Starts Remained Flat in February
- Wikipedia: Construction
- Construction on Historic Redevelopment of Mary Ellen McCormack Housing Complex
- Google Search: Mary Ellen McCormack Housing Complex
- AHSC Starts Construction on Boston Affordable Project
- Google Scholar: Boston Affordable Construction
- Construction Starts on Crescent Towing and Boston Towing Newbuilds
- Encyclopedia Britannica: Towing
- Construction Begins on Turning Empty Office Space into Residential Units
- Google News: Office Space to Residential Construction
Author: STAFF HERE WASHINGTON DC
WASHINGTON DC STAFF WRITER The WASHINGTON DC STAFF WRITER represents the experienced team at HEREWashingtonDC.com, your go-to source for actionable local news and information in Washington, DC, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and regional news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the National Cherry Blossom Festival, Kennedy Center Honors, and the Washington Auto Show. Our coverage extends to key organizations like the Greater Washington Board of Trade and Destination DC, plus leading businesses in government contracting and technology that power the local economy such as Lockheed Martin and Amazon. As part of the broader HERE network, we provide comprehensive, credible insights into the dynamic landscape of the Washington metropolitan area.
