US construction begins 2025 on a ‘far from encouraging’ note

National construction spending decreased by 0.2% in January, according to the Associated Builders and Contractors.

Despite the January dip, construction spending increased 3.3% year over year.

While total construction spending decreased month over month, nonresidential construction increased 0.1% in January and 3.4% year over year.

On a seasonally adjusted annualized basis, nonresidential spending totaled $1.2 trillion.

Residential construction dipped 0.5% month over month but increased 3.2% year over year.

Spending on private construction projects slipped by 0.2%. Investment in residential construction declined 0.4%, but outlays on new single-family projects rose 0.6%.

“Nonresidential construction spending rebounded slightly in January, yet this report is far from encouraging,” said ABC chief economist Anirban Basu in a prepared statement.

“Despite high interest rates and the looming effects of tariffs and heightened economic uncertainty, contractors remain optimistic,” Basu said. “Nearly 65% of contractors expect their sales to increase during the first half of 2025.”