According to the U.S. Census Bureau, construction spending during January 2025 was estimated at a seasonally adjusted annual rate of $2,192.5 billion, 0.2% (±0.7%) below the revised December estimate of $2,196.0 billion. The January figure is 3.3% (±1.3%) above the January 2024 estimate of $2,122.2 billion.
In January, the estimated seasonally adjusted annual rate of public construction spending was $506.6 billion, 0.1% (±1.3%) above the revised December estimate of $505.9 billion.
- Highway construction was at a seasonally adjusted annual rate of $145.0 billion, 0.6% (±3.9%) above the revised December estimate of $144.1 billion.
- Educational construction was at a seasonally adjusted annual rate of $109.8 billion, 0.4% (±2.0%) below the revised December estimate of $110.3 billion.
Spending on private construction was at a seasonally adjusted annual rate of $1,686.0 billion, 0.2% (±0.7%) below the revised December estimate of $1,690.1 billion.
- Residential construction was at a seasonally adjusted annual rate of $932.7 billion in January, 0.4% (±1.3%) below the revised December estimate of $936.9 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $753.3 billion in January, virtually unchanged from (±0.7%) the revised December estimate of $753.2 billion.
“Construction spending growth has been slowing under pressure from high interest costs and now the prospect of new waves of tariffs,” said Ken Simonson, chief economist of the Associated General Contractors of America. “There have already been notable cancellations and postponements for major manufacturing plants and the impacts of new tariffs are likely to lead to more delays and cancellations.”
Association officials noted that the new tariffs will make the cost of a broad range of construction materials more expensive, whether they are from Canada, Mexico and China or from domestic producers who are likely to raise prices as well. They urged the Trump administration to work quickly to resolve the underlying disputes that are prompting the new tariffs in order to mitigate the negative impacts of the tariffs.
“Higher interest rates are making it harder to get private sector projects approved, and these new tariffs are likely to prompt many developers to hit pause on new projects,” said Jeffrey H. Shoaf, the association’s chief executive officer. “We all want to see more domestic suppliers of construction materials, but undermining demand for construction isn’t the right way to stimulate new domestic capacity.”
“Nonresidential construction spending rebounded slightly in January, yet this report is far from encouraging,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “Data center construction spending increased another 1.9% for the month, accounting for more than three-fourths of the monthly increase in nonresidential activity. While that segment is so hot that it can melt through the effects of high interest rates, many other categories appear to be frozen in place. Even manufacturing, which still accounts for nearly $1 in every $5 of nonresidential construction spending, is virtually unchanged since May of last year.
“Despite high interest rates and the looming effects of tariffs and heightened economic uncertainty, contractors remain optimistic,” said Basu. “Nearly 65% of contractors expect their sales to increase during the first half of 2025, according to the January reading of ABC’s Construction Confidence Index. That said, it’s possible that the February reading of ABC’s CCI will show increased pessimism given declines in other economic confidence indicators.”