Total construction spending rose 0.5% in October on a monthly basis, according to data released by the US Census Bureau. Year-on-year, spending fell 0.9% from October 2024.
Residential construction spending rose 1.3% from September, and fell 1% for the year. In the non-residential sector, monthly spending remained flat while annual spending fell by 0.9%.
Nonresidential construction “did not pick up momentum” in October, Anirban Basu, chief economist at Associated Builders and Contractors, said in a statement. “While there are few sources of private non-residential growth outside the data center category that are still growing, much of the recent decline in construction spending is due to a precipitous drop in manufacturing investment,” he said, adding that “with the wind-down of megaprojects enabled by the CHIPS Act and strong trade policy headwinds, manufacturing construction spending has fallen nearly 110% over the past few months. decrease in non-residential private spending”.
Manufacturing experienced the steepest year-over-year decline of 9.6%, while spending in the commercial and education sectors fell by 2.3% and 1.5%, respectively. Jeffrey D. Shoaf, CEO of the Associated General Contractors of America, noted that federal officials have options to “encourage more construction activity while making the economy more productive,” suggesting actions such as “reducing red tape, making abandonment or abandonment decisions more quickly and continuing to invest in vital infrastructure will increase employment, spur new economic activity and make the American economy even more competitive.”
