Dive Brief:<\/h3>\n\n- Nonresidential construction spending fell 0.5%<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a> in March to a seasonally adjusted annual rate of $1.25 trillion, retreating from February\u2019s record-setting high, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data released Thursday.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n
- Spending declined in 11 of the 16 nonresidential subcategories, with private nonresidential construction dropping 0.8% and public nonresidential spending slipping 0.2%, according to the report.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n
- Data centers remain the primary driver<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a> of private construction growth, while high borrowing costs, lending constraints and trade uncertainty continue to <\/span><\/span><\/span><\/span><\/span><\/span>stall broader market activity<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a>, said Anirban Basu, ABC chief economist.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n
Dive Insight:<\/h3>\n
Nonresidential construction spending tumbled in March<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a> after reaching an all-time high in February, with declines seen across nearly all private categories, said Ken Simonson, chief economist of the Associated General Contractors of America.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u201cMedia reports and corporate announcements suggest owners are hesitant to start new projects in light of uncertainty over tariffs, government funding and other policy upheavals,\u201d said Simonson. \u201cSpending has slowed over the past year and as current projects wind down, there may be several months of declining construction activity.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nThat caution is already materializing in the data, said Basu. Even manufacturing construction, a key growth area last year, lost steam in March.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n![\"-\"](\"https:\/\/lh7-rt.googleusercontent.com\/docsz\/AD_4nXdTEsxwpLQmcuT2zxUtYpEgR9kd3jUFD_68ApRvXutmGHFjvaNHunlbqVRIAwTdYq2-ChlsOvs9Yel2ParLEi82GEmUxL-a1TWqkqlg1ZCSBiAVM2L7xqqR0HjYU24_--OWnOTSNg?key=L4BkYTxGSpvgmWaU7xG9XHNZ\")
<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u201cNonresidential construction spending fell sharply in March, with declines spread across virtually every private subsector,\u201d said Basu. \u201cData center investments, which accounted for more than 70% of the increase in private nonresidential construction spending between March 2024 and March 2025, are perhaps the only remaining source of industry momentum.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nNevertheless, ABC data shows public nonresidential spending remains up 4.8% year over year, while private nonresidential spending ticked up just 1.6% over the same period.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n\u201cGiven unprecedented economic uncertainty, spending is unlikely to rebound in the coming months,\u201d said Basu. \u201cWhile a majority of contractors surveyed in March were still optimistic about their future sales, according to ABC\u2019s Construction Confidence Index, sentiment is likely to falter as the effects of tariffs begin to raise input prices and stall or cancel projects.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nThe overall U.S. economy shrank 0.3% in the first quarter as imports surged ahead of Trump administration tariffs, according to Commerce Department data. The drop marks the first contraction since the first quarter of 2022.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n
Dive Insight:<\/h3>\n
Nonresidential construction spending tumbled in March<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a> after reaching an all-time high in February, with declines seen across nearly all private categories, said Ken Simonson, chief economist of the Associated General Contractors of America.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cMedia reports and corporate announcements suggest owners are hesitant to start new projects in light of uncertainty over tariffs, government funding and other policy upheavals,\u201d said Simonson. \u201cSpending has slowed over the past year and as current projects wind down, there may be several months of declining construction activity.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n That caution is already materializing in the data, said Basu. Even manufacturing construction, a key growth area last year, lost steam in March.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cNonresidential construction spending fell sharply in March, with declines spread across virtually every private subsector,\u201d said Basu. \u201cData center investments, which accounted for more than 70% of the increase in private nonresidential construction spending between March 2024 and March 2025, are perhaps the only remaining source of industry momentum.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Nevertheless, ABC data shows public nonresidential spending remains up 4.8% year over year, while private nonresidential spending ticked up just 1.6% over the same period.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cGiven unprecedented economic uncertainty, spending is unlikely to rebound in the coming months,\u201d said Basu. \u201cWhile a majority of contractors surveyed in March were still optimistic about their future sales, according to ABC\u2019s Construction Confidence Index, sentiment is likely to falter as the effects of tariffs begin to raise input prices and stall or cancel projects.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n The overall U.S. economy shrank 0.3% in the first quarter as imports surged ahead of Trump administration tariffs, according to Commerce Department data. The drop marks the first contraction since the first quarter of 2022.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n