For the first time in 17 months, U.S. construction spending has declined, according to the latest data from the Census Bureau.
- In May, construction spending fell to a seasonally adjusted annual rate of $2.139 trillion, marking a 0.1% decrease from the previous month.
- This drop is notable as it breaks a positive streak that has persisted since October 2022 and falls short of the 0.1% rise that economists had projected.
Residential Construction: Saw a slight decline of 0.2% in May but remains up by 5.4% year-over-year. Within the residential sector, single-family construction spending decreased to a seasonally adjusted annual rate of $436.6 billion in May, down 0.7% from April and reaching its lowest level since January. This represents the largest monthly drop since April 2023, though it still shows a significant year-over-year increase of 13.8%.
- Multifamily construction spending remained flat in May and has decreased by 4.6% compared to the same period last year.
Bottom Line: This downturn in construction spending highlights a potential shift in the sector’s momentum after a prolonged period of growth. The decline in single-family construction, in particular, suggests cooling demand in the housing market, despite overall year-over-year gains. As the construction industry navigates these changes, future reports will be closely watched for signs of recovery or further declines.
