Contracting Officials Warn That Failure to Renew Highway and Transit Funding Will Undercut One of the Economy's Strongest Drivers in Public Infrastructure Spending
Construction spending edged up 0.1 percent in May from the previous month but declined 1.5 percent compared to a year ago, according to an analysis by the Associated General Contractors of America of a new government report released today. Association officials urged Congress and the White House to pass a new highway and transportation funding bill before the current law expires in September in order to provide greater certainty for contractors and sustain public infrastructure investment.
"Highway construction is one of the strongest segments of the construction market," said Ken Simonson, the association’s chief economist. “Infrastructure investment is offsetting weakness in several private segments.”
Construction spending totaled $2.210 trillion at a seasonally adjusted annual rate in May. That figure is 0.1 percent above the revised April rate but 1.5 percent below the May 2025 level.
Public construction spending increased 0.5 percent in May and was 0.3 percent higher than one year earlier. The largest public category, highway and street construction, increased 0.6 percent from April and 2.9 percent over the past year. That segment continues to account for more than a quarter of all public construction spending while supporting economic growth through improved movement of people and freight and demand for construction materials and equipment.
Private residential construction increased 0.3 percent for the month and was 1.8 percent higher than in May 2025, thanks to an 8.1 percent year-over-year increase in residential additions and renovations. Single-family construction slipped 0.1 percent from April and remained 4.0 percent below year-earlier levels. Multifamily construction also declined 0.1 percent for the month but remained 3.3 percent higher than one year earlier.
Private nonresidential construction declined 0.3 percent in May and 6.6 percent year-over-year. Manufacturing construction continued to weaken sharply, dropping 22.0 percent over the past 12 months. Commercial construction decreased 0.3 percent from April and 5.5 percent from the year, while health care construction fell 5.9 percent and educational construction declined 2.5 percent. The second-largest private category, power and oil-and-gas construction, edged down 0.1 percent for the month but remained 2.3 percent higher than a year earlier. Private office construction rose 0.2 percent for the month and 4.7 percent over 12 months, reflecting continued strength in data center construction, which increased 23.0 percent over the past 12 months.
Association officials noted that federal funding for highway and transit construction supports projects in every state, improving travel times, strengthening supply chains, and supporting construction employment. They urged Congress to complete work on renewing the federal surface transportation law before it expires on Sept. 30. The association will highlight new nationwide polling on public support for renewing the law during a media briefing on Thursday. Members of the media can join the briefing here.
“Federal transportation investments have helped support construction activity, job growth and stronger economic performance across the country,” said Jeffrey D. Shoaf, the association’s chief executive officer. “Our new polling shows voters overwhelmingly recognize those benefits and want Congress to pass a new highway and transit funding bill before the current law expires.”
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