August 2025 Construction Spending Update

Q2 2025 Construction Spending Update (August 1 Data Release):

The August 1 Census data release confirms that the US construction market has entered a clear period of spending decline.

For Q2 2025, construction spending decreased across the board—total (-0.8%), residential (-1.3%), and nonresidential (-0.5%)—with annual comparisons also in negative territory. This marks a notable shift from the moderate growth seen through much of 2024.

Key observations:

• Privately funded segments such as Office (down 17% excluding data center), Lodging, and Commercial have pulled back significantly.
• Manufacturing construction has started to decline, led by cuts in EV battery and chip fab projects, though pharmaceutical and food sectors are showing growth.
• Data center construction remains strong, now at $40B annually and still trending upward.
• Infrastructure markets remain resilient, supported by Infrastructure Act funding through 2026, though the long-term outlook is less certain.
• Education and healthcare construction are stable for now but face looming policy and funding threats.
• Single-family residential spending dropped again, while multi-family appears to have stabilized at low levels.
• AIA billings and design contracts remain negative, with no short-term signs of a turnaround.

Despite the pullback, total construction spending remains 30% above pre-2020 levels—underscoring just how historically strong the past few years have been.

Get the full update here: August 2025 Construction Spending Update