ConDig (03-Jun-25) US nonresidential construction spending dipped slightly in April, continuing a sluggish trend for the sector amid persistent economic and policy challenges, according to new data from the U.S. Census Bureau analyzed by the Associated Builders and Contractors (ABC).

Seasonally adjusted annualized spending on nonresidential construction totaled $1.248 trillion in April, a 0.1% decline from the previous month. The drop marks the third monthly decrease in private nonresidential activity this year, with spending in that segment falling 0.5% in April. In contrast, public nonresidential construction rose 0.5% month-over-month.

“Construction spending slipped in April as headwinds like trade policy uncertainty, high interest rates and tight lending standards continued to batter industrywide momentum,” said Anirban Basu, ABC’s chief economist. “Nearly 22% of contractors reported tariff-related project delays or cancellations in April, and despite changes to certain import tax rates in May, policy uncertainty remains extraordinarily elevated.”

Of the 16 tracked nonresidential subcategories, spending declined in six. One of the biggest concerns, according to Basu, is the private sector’s downturn, which is on track for a 4% annual decline in 2025. Particularly worrying is the steep 10% year-over-year drop in computer and electronic manufacturing construction — a segment that had buoyed the industry through 2023 and 2024.

“With the exception of data centers and certain public sector segments, the industry has few bright spots at the moment,” Basu added.

As contractors navigate a tough mix of inflationary pressures, project financing difficulties and geopolitical uncertainties, analysts warn that a sustained rebound in nonresidential construction could hinge on clearer policy direction and more favorable economic conditions.