North Carolina Construction News staff writer
U.S. construction spending fell for the third consecutive month in April, declining 0.4% from March and 0.5% from a year earlier, marking the first year-over-year decrease since April 2019, according to an analysis by the Associated General Contractors of America (AGC).
The seasonally adjusted annual spending total was $2.15 trillion, slightly below the downwardly revised figure for March. The April decline follows previous monthly drops of 0.8% in March and 0.7% in February.
“A pullback in many types of private nonresidential projects, as well as a sharp drop in homebuilding, contributed to the latest drop in construction spending,” said Ken Simonson, chief economist for the AGC. He added that ongoing uncertainty around tariffs on construction materials is making project owners hesitant to move forward.
Private nonresidential construction spending fell 0.5% in April and rose only 1.0% from April 2024, the smallest year-over-year increase since July 2021. Spending on manufacturing plants—the sector’s largest component—declined 0.6%, while power-related construction dropped 0.7%. Commercial construction, including warehouses, retail, and agricultural buildings, was down 1.0% for the month.
Private residential construction continued its downward trend, dropping 0.9% from March and 4.8% from a year earlier. Spending on single-family housing fell 1.1%, home improvement spending declined 0.8%, and multifamily construction slipped 0.1%.
In contrast, public construction spending provided some relief, increasing 0.4% for the month and 5.5% year-over-year. Highway and street construction rose 0.5%, transportation facilities increased 0.7%, while spending on educational facilities edged down 0.1%.
AGC officials warned that ongoing volatility in trade policy, particularly regarding tariffs on essential construction inputs like steel, aluminum, and lumber, is discouraging investment and could further hamper economic growth.
“Unless contractors and investors have greater certainty about what costs and demand to expect, private construction is likely to continue declining,” said Jeffrey D. Shoaf, AGC’s chief executive officer. “That will make the U.S. less competitive and damage the prospects for economic growth.”
The association urged the Biden administration to avoid imposing or expanding tariffs on key materials and to work toward more stable trade relationships to restore confidence in the construction sector.