Construction Spending Stalls
US Construction Spending Sees Slight May Gain of 0.1%, Still Down 1.5% Year-Over-Year
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Key Points
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Private construction details in May showed new single-family construction at $410.255 billion (down 0.1% from April and 4.0% below May 2025) and new multifamily construction at $116.106 billion (up 0.1% from April and 3.3% above a year earlier).
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The May report notes a 90% confidence interval that includes zero for total construction, private construction, and public construction month-to-month changes, signaling the monthly uptick may not be statistically different from zero.
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For the first five months of 2026, total construction spending totaled about $858.4 billion, down 2.7% from $882.2 billion in the same period of 2025.
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May’s spending reached $2.2102 trillion, up 0.1% from the revised April level of $2.2071 trillion; analysts had forecast a 0.2% gain.
U.S. construction spending barely budged in May, rising just 0.1% to an annual rate of $2.21 trillion, according to MarketWatch. That missed the analyst forecast of a 0.2% gain — and left total spending 1.5% below where it was a year ago.
The modest gain may not even be real. The Census Bureau's own report flags a 90% confidence interval that includes zero, meaning the uptick is statistically indistinguishable from no change at all, according to Sharecast.
Single-Family Home Building Drops While Rentals Hold Steady
Private construction spending came in flat at roughly $1.67 trillion in May. Residential spending rose 0.3% to $930.2 billion. But the details tell a more divided story, according to MarketWatch.
New single-family construction fell 0.1% from April to $410.3 billion — and sits 4.0% below May 2025. Multifamily construction, mostly apartment buildings, rose 0.1% to $116.1 billion and is up 3.3% year over year. Individual buyers are pulling back. But developers building rentals are still active, betting that demand for apartments stays strong.
Public Spending Picks Up Slack as Private Sector Stalls
Public construction rose 0.5% in May to $541.2 billion, according to Sharecast. That was the brightest spot in an otherwise flat report. Highway and street spending climbed 0.6% to $150.6 billion. Educational construction rose 0.6% to $113.4 billion.
Long-term municipal contracts and federal infrastructure funding are keeping public projects alive even as private developers slow down. Economists note that public construction is now acting as the main floor under the broader sector, preventing a steeper overall decline.
2026 Has Been the Worst Year for Construction Spending Since 2025
Zooming out, the picture gets harder to spin as a recovery. Total construction spending for the first five months of 2026 reached $858.4 billion — down 2.7% from $882.2 billion during the same period in 2025, according to MarketWatch.
Nonresidential private construction — think offices, factories, and commercial buildings — fell 0.3% in May. Combined with the single-family slump, private developers are clearly tightening up. Higher borrowing costs and weaker demand are squeezing margins and forcing projects to slow or stall.
Housing Shortage Risk Grows as Builders Pull Back
The 4.0% year-over-year drop in single-family construction spending is raising alarms about housing supply. Fewer homes being built means inventory stays low. Low inventory keeps home prices high — even as spending falls, according to MarketWatch.
Construction is typically about 4% of U.S. GDP. A 2.7% year-to-date decline puts pressure on the economy's "fixed investment" component — the portion of GDP that tracks spending on buildings and equipment. If public projects can't fully offset the private slowdown, that drag could show up in second- and third-quarter growth numbers.
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