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Construction Spending Shows Mixed Results in May


Total construction spending in May increased by 0.9% from April and 2.4% year-over-year as gains in manufacturing construction and single-family homebuilding offset a downturn in major infrastructure segments, according to a July 3 analysis by the Associated General Contractors of America of federal data.

    

“The data for May show there has been no letup in the feverish pace of manufacturing construction but a very mixed picture for other project types,” said Ken Simonson, the association’s chief economist. “There have been strong year-over-year increases in most categories but it remains to be seen if the market is now cooling.”

    

Construction spending, not adjusted for inflation, totaled $1.925 trillion at a seasonally adjusted annual rate in May. Monthly and year-over-year changes varied among major segments. Spending on private nonresidential construction slipped 0.3% from April but jumped 20.5% from a year earlier. Spending on public nonresidential construction inched up 0.1% in May and 12.3% over 12 months. Private residential spending surged 2.2% for the month but remained 11.6% below the May 2022 level.

    

Two types of private nonresidential spending increased significantly in May, while most other categories lagged. Manufacturing construction jumped 1.0% for the month and 76.9% year-over-year. Office construction, which includes data centers, rose 0.7% and 6.7%, respectively. But monthly spending slumped 1.8% for commercial construction—comprising warehouse, retail and farm projects—and 0.8% for private power construction. Private health care construction tumbled 2.1% for the month.

    

Public construction spending was mixed, as the largest infrastructure categories declined for the month and education spending was flat. Highway and street construction declined 0.4% from April and public spending on transportation facilities, such as airports, transit and passenger rail, slid 0.8%. There were monthly increases of 1.1% in spending on sewage and waste disposal and 2.6% on water supply but a drop of 3.8% in conservation and development, such as river and harbor projects.

    

The pickup in private residential spending was led by a 1.7% increase in single-family homebuilding—the first gain since April 2022. Multifamily construction dipped by less than 0.1%, its first decline since July 2022.

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