Nonresidential construction spending dropped 0.2 percent in May to a seasonally adjusted annual rate of $1.237 trillion, according to an Associated Builders and Contractors analysis released July 1. Spending fell from the month prior in eight of 16 categories, according to ABC. Private nonresidential construction fell 0.4 percent and public nonresidential spending remained unchanged from the month before.
Many headwinds, such as high interest rates, a tight lending environment, new trade and immigration policies, and general uncertainty may make it a challenge for spending to rebound in the second half of 2025, says ABC chief economist Anirban Basu.
“Private sector nonresidential activity remains particularly weak and is down nearly 7 percent from its January 2023 peak,” Basu says in the release. “Manufacturing investment, which increased more than 200 percent in recent years, has begun to fall and is now down more than 5 percent since its August 2024 peak. With the exception of data centers, on which spending increased another 1 percent in May, there are few categories with momentum.”
In addition, May’s spending was down 3.5 percent year over year, the largest such decrease since February 2019, according to the Associated General Contractors of America.
Source: www.constructiondive.com