Spending Slides Across Key Sectors, Echoing Pre-2020 Economic Patterns

Recently, the US Census released the results of its monthly Value of Construction Put in Place Survey. The survey provides estimates of the total dollar value of construction work done in the U.S. This data includes design and construction spending for public and private projects.

The seasonally adjusted annual rate of $2.14 trillion for May 2025 represents a monthly decline of -0.3%. Due to revisions, this is the 9th consecutive month of decline for the growth rate; the last time there were sustained months of decline was June-December 2018. This also represents a -3.5% decline in year-over-year growth. This is now the 4th consecutive month of year-over-year declines. The last time there were 4 or more months of consecutive year over year declines was Dec 2018 -April 2019. Private construction saw a month-over month-decline of -0.5%; Public construction grew 0.1%.

Source: US Census Value of Construction Put in Place Survey July 1, 2025 release

This decrease in growth is consistent with other economic data released recently. Revised estimates for 2025 Q1 GDP show contraction with a -0.5% real growth rate in GDP, down from -0.3%

The overall decline in topline growth masks the underlying variance of sector specific growth. Factors such as higher for longer interest rates, changes in fiscal policy, trade uncertainty and other economic conditions account for this variability. The residential market declined -0.5% month over month while the nonresidential market declined -0.2%.

Source: US Census Value of Construction Put in Place Survey July 1, 2025 release

With respect to year to date growth in individual markets, 2025 continues a shift away from sectors that previously lead growth and new sectors emerging. The Water sector continues to grow in both Supply and Sewage & Waste Disposal, while growth in Amusement & Recreation remains strong and Public safety is a top growth market, replacing Transportation.

For the sectors in decline, Commercial continues to see declines due to interest rate sensitivity and other secular trends affecting demand. The Residential sector is seeing declines after rebounding from Spring 2023 lows, while Highway & Street continues to be negative. In total 9 sectors have year to date declines in spending now compared to 4 sectors in last months’ update.

 

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