National nonresidential construction spending decreased 0.2 percent in July, according to an Associated Builders and Contractors (AGC) analysis of data published by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.24 trillion.
Spending was down on a monthly basis in seven of the 16 nonresidential subcategories. Private nonresidential spending was down 0.5 percent, while public nonresidential construction spending was up 0.3 percent in July.
“Nonresidential construction spending fell for a third consecutive month in July and is now down 2.5 percent from the December 2023 record high,” says ABC chief economist Anirban Basu. “Of course, that’s in nominal terms. With construction materials prices rising rapidly in recent months and set to continue as higher tariff rates go into effect, the recent decline in construction activity is even larger than this data series suggests.
“Private nonresidential activity has declined at a particularly concerning pace over the past several months and fell another 0.5 percent in July,” says Basu. “With the exception of the religious category, which represents less than 1 percent of private nonresidential construction activity, and the power category, which is surging due to data centers and their considerable energy needs, no private subsegment has retained momentum through the first half of 2025.
“Nearly one in four ABC members reported having a project interrupted or canceled due to tariffs in July, according to ABC’s Construction Backlog Indicator survey, and that predates the particularly large import tax increases put into effect in early August,” said Basu. “With economic uncertainty still elevated, labor shortages reemerging and materials prices rising, it may be a bleak second half of the year for the construction industry.”
