The 2022 increase will bring total starts to $1.086 billion, but $1.083 billion is predicted for 2023. 

Rising interest rates have weakened the residential market, with single-family housing, measured in number of units, expected to decline 12% by the end of this year. Dodge predicts a decline of 6% to follow in 2023. In the multi-family sector, starts are expected to finish the year up 16%, but will drop 9% next year.

Dodge forecasts that the dollar value of commercial construction—which includes warehouses, offices, retail and hotels—will finish 2022r up 24% before dropping 3% in 2023. Retail is up 31% in 2022, which Branch attributes to increased single-family building in suburban areas in the last several years. Just as residential construction slowed, he says retail will also, with Dodge predicting just a 4% increase next year.

Following two years of decline during the pandemic, the dollar value of office construction is expected to rise 23% by the end of 2022, before slightly declining, at a rate of 1%, in 2023. While the number of in-office workers has increased in the past year, remote work is still prevalent, particularly in a tight labor market, notes Branch, which is driving down office construction for the coming year.

The manufacturing sector soared in 2022, up 196%. Branch attributes this to "onshoring," as companies bring plants back to the U.S., particularly chip manufacturing facilities incentivized by the new U.S. Inflation Reduction Act.

While a 43% drop is expected in 2023, "that is still historically a very strong record level of activity," Branch said, at a rate of $51.2 billion.

Institutional starts are forecast to rise 22% this year, with healthcare and education increases of 23% and 8%, respectively. Transportation rose 110%, largely due to the renovation of John F. Kennedy Airport in New York City, and is expected to fall 36% next year. Overall, institutional starts are predicted to remain flat in 2023. Total non-building starts are up 19%, with another 16% increase expected next year.