Total construction spending rose 0.1% in May compared with April, according to data recently released by the U.S. Census Bureau; spending declined 1.5% year over year.
Residential spending rose on both a monthly and yearly basis, at a rate of 0.4% and 1.8%, respectively, while monthly non-residential spending stayed flat. Since May 2025, non-residential spending has fallen 3.8%.
Private non-residential spending fell 0.3% since April, dropping “for the seventh consecutive month in May and… down 6.6% on a year-over-year basis,” Anirban Basu, chief economist at Associated Builders and Contractors, said in a statement.
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Total Construction Spending in May Continues Its Decline
“This weakness is largely due to the ongoing decline in manufacturing-related construction spending as CHIPS Act-supported projects wind down, yet overall there are few sources of momentum in the segment,” he added.
While some non-residential segments, such as religious and amusement and recreation construction have seen growth, “those modestly sized segments are far too small to carry the broader nonresidential market, especially given the weakness in larger categories,” Basu said.
“For instance, warehouse construction spending, which appeared to stabilize at the start of 2026, has now fallen for three consecutive months and is down 8.5% year over year, while the general office category remains in a state of freefall, down 11.9% since May 2025,” he added.
Transportation construction for highways and streets has seen a modest annual increase since May of last year. However, Basu notes, “Currently, the momentum is primarily concentrated in the data center segment.”
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