Total construction spending rose 0.1% in May compared to April, according to data recently released by the US Census Bureau; spending decreased by 1.5% year-on-year.
Residential spending increased in both monthly and annual terms, at a rate of 0.4% and 1.8%, respectively, while monthly non-residential spending remained stable. Since May 2025, non-residential spending has fallen by 3.8%.
Private non-residential spending fell 0.3% from April, fell “for the seventh consecutive month in May and … by 6.6% year-on-year,” Anirban Basu, chief economist at Associated Builders and Contractors, said in a statement.
“This weakness is largely due to continued declines in manufacturing-related construction spending as projects supported by the CHIPS Act wind down, but overall there are few sources of momentum in the segment,” he added.
While some non-residential segments, such as religious construction and leisure and recreation, have seen growth, “these modest-sized segments are too small to carry the broader non-residential market, especially given the weakness of the larger categories,” Basu said.
“For example, warehouse construction spending, which appeared to stabilize in early 2026, has now fallen for three consecutive months and is down 8.5% year-on-year, while the general office category remains in freefall, down 11.9% since May 2025,” he added.
Highway and street transportation construction has seen a modest annual increase since May of last year. However, Basu notes, “Currently, the momentum is mostly concentrated in the data center segment.”
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