Nonresidential Construction Spending Plunges in March

National nonresidential construction spending decreased 0.5% in March, according to an Associated Builders and Contractors analysis of data published by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.25 trillion.

Spending was down on a monthly basis in 11 of the 16 nonresidential subcategories. Private nonresidential spending fell 0.8%, while public nonresidential construction spending was down 0.2% in March.

“Nonresidential construction spending fell sharply in March, with declines spread across virtually every private subsector,” said ABC Chief Economist Anirban Basu. “Data center investments, which accounted for more than 70% of the increase in private nonresidential construction spending between March 2024 and March 2025, are perhaps the only remaining source of industry momentum. Manufacturing construction, while still elevated, has wavered in recent months. Most commercial segments remain subdued under the weight of high borrowing costs and tight lending standards. Residential construction continues to slide.

“Given unprecedented economic uncertainty, spending is unlikely to rebound in the coming months,” said Basu. “While a majority of contractors surveyed in March were still optimistic about their future sales, according to ABC’s Construction Confidence Index, sentiment is likely to falter as the effects of tariffs begin to raise input prices and stall or cancel projects.”