Northeast construction starts slow following rebound last year

This story is the third in a series looking at the health of the construction industry in regions throughout the country. Click here for the first article and here for the second.

Total construction starts in the U.S. Northeast region in 2021 improved 20%, ahead of the national start growth, according to a Dodge Construction outlook webinar. But activity has slowed in the first part of 2022.

“Northeastern states will have to continue grappling with the wide array of headwinds that will remain present in 2022 — high inflation, supply chain issues, COVID-19 variants and the rather delicate consumer and investor sentiment,” said Sarah Martin, senior economist at Dodge. “So, we could see a slower than projected growth across the Northeast, especially as the risk of recession increases.”

Education and healthcare construction starts led the nonresidential category in the Northeast region, which consists of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont. That mirrors construction trends in other U.S. regions, like the West, where education starts led in the region too.


For 2022, Dodge forecasts education starts in the Northeast region will reach $14.9 billion, a 19% increase from a year ago. Along with campus projects, the education category also includes research labs, according to Dodge. Pharmaceutical labs, on the other hand, are included in the manufacturing category, another growth sector in the region. 

“Education leads the pack as the largest sector in the Northeast,” said Martin. “Education starts are expected to continue to improve this year as more students return to classrooms on both the K-12 side and in colleges and universities.”

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Sebastian Obando/Construction Dive, data from Dodge Data & Analytics


For example, some major education projects include the $388 million Rutgers University Cancer Institute and the $250 million Lincoln Street lab office and parking garage in Boston. 

Largest Northeast starts October 2021 through March 2022
Project Type Location Start month Value
Vineyard Wind 1 Energy Development Environmental Barnstable, Massachusetts November 2021 $1.6 billion
JFK Airport Terminal 4 Expansion Transportation Queens, New York January 2022 $1.5 billion
East Coastal Resiliency Project Flood Control New York City December 2021 $1.27 billion
Amtrak Gateway Bridge Enhancement Bridge Secaucus, New Jersey January 2022 $1.04 billion
Moses-Adirondack Smart Path Environmental New York City October 2021 $484 million
Rutgers Cancer Institute Education New Brunswick, New Jersey January 2022 $388 million
Anaerobic Digester Facilities Sewer Hunts Point, New York March 2022 $309 million
Baron Winds Project 121MW PH1 Environmental Cohocton, New York November 2021 $297 million
Amazon Robotics Fulfillment Center Warehouse Johnston, Rhode Island February 2022 $290 million
Broad & Washington Mixed-Use Apartment Philadelphia January 2022 $275 million

SOURCE: Dodge Data & Analytics


Another growth sector in the region includes healthcare construction. Dodge forecasts 2022 starts in this sector to reach $6.25 billion, a 50% increase from 2021. This category includes inpatient hospitals, clinics and nursing homes.

Richard Branch, chief economist at Dodge, said to expect growth opportunities specifically in inpatient hospital construction. 

“There’s been a huge underinvestment in the inpatient side of the market here in the United States,” said Branch. “That will certainly allow this market to grow. I think inpatient will outgrow outpatient.”

Martin said as people move away from major metro areas in high cost cities in the Northeast, that could spark development in healthcare starts in more rural areas of the region, such as New Hampshire, Vermont and Maine, which have had among the highest rates of in-migration since the start of the pandemic.


Dodge estimates manufacturing starts in the Northeast will reach $2.99 billion in 2022, or 47% year-over-year growth. Still, that’s just a fragment of the manufacturing construction activity in the West, for example, where Dodge projects starts to reach $14.39 billion in 2022. 

Inflation’s impact

Taken at face value, those increases are impressive. But inflation is boosting the growth numbers, said Martin.

For example, adjusted for inflation, projected 2022 education starts drop from 19% growth to 7% growth. Forecasted nonbuilding starts in 2022, such as highways, bridges, power plants and gas plants, drop from a 8% growth to a 3% contraction when inflation is taken into account.

Similar to the rest of the U.S., Dodge forecasts office starts in 2022 in the Northeast region to drop to $8.35 billion, a 17% decrease from 2021. Hospitality starts are pegged to fall to $1 billion, a 4% drop from 2021.

Northeast area leaders and laggards

New York led the Northeast region in 2021 with about $41.27 billion of total construction starts, an 18% increase from 2020. Despite the growth, starts still lagged the $50.71 billion pre-pandemic level seen in 2019. And through April, building had slowed.  

For the first four months in 2022, nonresidential construction activity in the New York, Northern New Jersey and Long Island region dropped 4%.