Nonresidential Construction Spending Down 0.2% in May

WASHINGTON, DC — Nationwide nonresidential development spending decreased 0.2% in Could, based on an Related Builders and Contractors evaluation of knowledge printed at this time by the US Census Bureau. On a seasonally adjusted annualized foundation, nonresidential spending totaled $1.237 trillion.

Spending was down on a month-to-month foundation in half of the nonresidential subcategories. Non-public nonresidential spending was down 0.4%, whereas public nonresidential development spending was virtually unchanged in Could.

“Nonresidential development spending declined for the fourth straight month in Could,” mentioned ABC Chief Economist Anirban Basu. “Non-public sector nonresidential exercise stays notably weak and is down almost 7% from its January 2023 peak. Manufacturing funding, which elevated greater than 200% lately, has begun to fall and is now down greater than 5% since its August 2024 peak. Apart from information facilities, on which spending elevated one other 1% in Could, there are few classes with momentum.

“This decline in nonresidential exercise was mirrored in ABC’s Construction Backlog Indicator, which fell sharply in Could,” mentioned Basu. “Given the various headwinds at play, together with excessive rates of interest, tight lending requirements, elevated uncertainty and the consequences of immigration and commerce coverage on labor and supplies prices, spending could battle to rebound throughout the second half of the yr.”