National nonresidential construction spending decreased 0.2% in May, according to an Associated Builders and Contractors’ analysis of data published by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.237 trillion.
Spending was down on a monthly basis in half of the nonresidential subcategories. Private nonresidential spending was down 0.4%, while public nonresidential construction spending was practically unchanged in May.
“Nonresidential construction spending declined for the fourth straight month in May,” said ABC Chief Economist Anirban Basu. “Private sector nonresidential activity remains particularly weak and is down nearly 7% from its January 2023 peak. Manufacturing investment, which increased more than 200% in recent years, has begun to fall and is now down more than 5% since its August 2024 peak. With the exception of data centers, on which spending increased another 1% in May, there are few categories with momentum.
“This decline in nonresidential activity was reflected in ABC’s Construction Backlog Indicator, which fell sharply in May,” said Basu. “Given the many headwinds at play, including high interest rates, tight lending standards, elevated uncertainty and the effects of immigration and trade policy on labor and materials costs, spending may struggle to rebound during the second half of the year.”
