Florida Construction News staff writer
While no regional breakdown is yet available, contractors across the country are feeling the effects of continued declines in U.S. construction spending, which fell for the fourth straight month in May, according to data from the Associated General Contractors of America (AGC).
Construction spending in the U.S. declined for the fourth straight month in May, dropping 0.3 percent from April and 3.5 percent from May 2024—the sharpest annual decline since February 2019, according to a new analysis by the Associated General Contractors of America (AGC).
The industry’s total spending reached a seasonally adjusted annual rate of $2.14 trillion, with steep cutbacks in private-sector activity largely offsetting modest growth in public construction.
AGC officials say uncertainty over tariffs, tax policy, and labor availability is driving many private developers to shelve or cancel planned projects.
“Uncertainty about tariffs, tax rates and labor availability are making it hard for many developers to risk moving forward with planned construction projects,” said Ken Simonson, AGC’s chief economist. “While public sector demand remains solid, it just isn’t enough to offset the private sector pullbacks in activity.”
Private non-residential construction declined 0.4 percent in May, down 3.9 percent year-over-year—its ninth straight annual drop. Spending on manufacturing plants, the largest segment, edged down 0.1 percent. Commercial construction, which includes warehouses, retail, and farm buildings, fell 0.8 percent, while power construction was down 0.6 percent.
On the residential side, spending dropped 0.5 percent for the month and 6.7 percent compared to May 2024. Single-family homebuilding saw a sharp 1.8 percent decline, while spending on owner-occupied home improvements rose slightly by 0.9 percent. Multifamily construction remained flat.
Public construction was a relative bright spot, rising 0.1 percent from April and 3.3 percent year-over-year. Transportation infrastructure led the gains with a 0.6 percent increase in spending. Educational facilities spending grew by 0.1 percent, while highway and street construction declined 0.3 percent.
AGC is urging the federal government to reduce economic uncertainty by resolving trade disputes, preventing tax hikes, and addressing persistent labor shortages in construction.
“The more certainty there is in the market, the more likely private sector developers will greenlight planned construction projects,” said Jeffrey D. Shoaf, AGC’s CEO. “Washington officials can help provide that certainty by setting clear tax rates, resolving trade disputes, and addressing significant construction labor shortages.”
The association is also calling for greater investment in construction education and training programs, along with expanded pathways for legal immigration to help grow the industry’s workforce.
