Spending on construction projects in July fell by 0.1 percent compared to June, according to an analysis of government data released by the Associated General Contractors of America. The decrease was attributed to declines in private nonresidential and multifamily construction, which outweighed increases in public construction and single-family homebuilding.
The total value of construction spending reached $2.14 trillion at a seasonally adjusted annual rate for July. This figure was nearly unchanged from May, following a small increase in June and a similar decline in July.
Private nonresidential construction dropped by 0.5 percent from June to July, while multifamily projects decreased by 0.4 percent. Within private nonresidential categories, manufacturing and private power construction each declined by 0.7 percent, commercial construction fell by 0.9 percent, and private office construction slipped by 0.2 percent.
Public sector spending increased slightly, with public construction outlays rising 0.3 percent and single-family homebuilding up by 0.1 percent over the month. However, highway and street construction as well as educational spending—two major public segments—each declined by 0.1 percent.
The association linked these trends to ongoing challenges faced by the industry, including tariffs and labor shortages. According to Ken Simonson, chief economist for the association: “Our survey of construction firms found 16 percent of contractors reported projects had been canceled, postponed, or scaled back as owners’ demand or need changed due to tariffs while 45 percent of firms report project delays because of labor shortages.” He added: “And 26 percent of firms said projects had been affected by changes in owners’ demand or need due to other policy changes such as federal funding, taxes, and regulations.”
Association officials have called for more stable policies to help address these issues. They urged the Trump administration to resolve trade disputes quickly and advocated for measures aimed at workforce development—including new pathways for people to enter the country’s construction workforce and increased investment in training programs.
Jeffrey D. Shoaf, chief executive officer of the association, said: “It is difficult for developers to launch new construction projects when they don’t know how much the project will cost or how long it will take to finish,” adding that “providing greater certainty on tariff rates and taking steps to address severe construction labor shortages will go a long way in stimulating new demand for construction.”
A recent survey conducted by the association found that many owners have canceled or deferred projects due to uncertainty related to tariffs and ongoing difficulties finding enough workers.