Contractors Say Weakness Is Spreading Across Much of the Private Construction Market Despite Continued Strength in Infrastructure, Power and Data Centers, While Highway Funding is at Risk of Sharp Downturn
Construction spending edged down 0.1 percent in June from the previous month and declined 3.2 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 cautioned that weakness is spreading across much of the construction market and urged federal officials to avoid policies that would further increase costs or discourage private investment.
“We're beginning to see weakness spread across much of the construction market," said Macrina Wilkins, the association's director of market insights. "While data centers and a handful of other segments remain bright spots, the largest public category—highway construction—is at risk of a sharp decrease if Congress fails to renew federal funding before the current law expires at the end of next month.”
Construction spending totaled $2.167 trillion at a seasonally adjusted annual rate in June. That figure is 0.1 percent below the revised May rate and 3.2 percent below the June 2025 level.
Private nonresidential construction increased 0.1 percent in June, but fell 4.7 percent compared to June 2025. Manufacturing construction continued to weaken sharply, dropping 22.0 percent over the past 12 months. Commercial construction decreased 1.3 percent from May and was 5.3 percent lower than one year ago, while healthcare construction fell 4.6 percent and educational construction declined 4.3 percent. Private “office” construction, which includes data centers in the government release, rose 2.8 percent for the month and was 15.1 percent higher than a year earlier. Data center construction increased 46.0 percent over the past 12 months, while other private office construction tumbled 11.6 percent.
Private residential construction decreased 0.3 percent for the month and was down 4.7 percent compared to June 2025. Single-family construction slipped 0.6 percent from May and remained 3.3 percent below year-earlier levels. Multifamily construction also declined 0.7 percent for the month and remained 1.5 percent lower than one year earlier.
Public construction spending remained flat in June and was 1.7 percent higher than one year earlier. The largest public category, highway and street construction, declined 0.1 percent from May but was 3.1 percent higher than a year earlier. Public infrastructure continues to provide an important source of construction activity as weakness spreads across much of the private construction market.
Association officials noted that highway and other public infrastructure projects continue to support construction activity even as many private construction categories weaken. They urged Congress to complete work on a new highway and transit authorization bill before the current law expires on September 30 in order to provide greater certainty for contractors and avoid shutting down projects essential for improving safety and reducing congestion.
“The latest spending data makes clear that public infrastructure is helping offset broader weakness in the construction market,” said Jeffrey D. Shoaf, the association's chief executive officer. “Congress should build on that momentum by renewing the federal highway and transit program before the current law expires. Providing contractors with long-term certainty will help keep infrastructure projects moving and support the entire economy, not just contractors and construction suppliers.”
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