CONSTRUCTION MARKET OVERVIEW
The public cushion deflates as private work keeps sliding
Total construction spending finished in June 3.1% below a year earlier, after March's 2.5% decline, and with materials inflation near 9.0% in June the real-terms contraction is deeper. The weakness has spread, with private nonresidential down 4.7% and residential, down just 0.3% as recently as March, fell 4.7.
Public outlays reached US$544bn in June on a seasonally adjusted annual rate (SAAR) basis, up 1.8% on the year, with public highways and street work up 3.1%. The IIJA boost is reaching a plateau, and the counterweight it has provided since 2022 no longer offsets private weakness.
Source: Census Bureau
Private non-residential keeps falling and the index gap keeps widening
On the rebased index (Q4 2019 = 100), private nonresidential slipped to 141.7 by Q2 2026 while public nonresidential rose to 153.3. These two series that moved in lockstep as recently as 2022 are now roughly 12 points apart, and the total nonresidential index, at 146.8, continues to be held up by the public side alone. Private spending has been declining since mid-2023, while public has been growing steadily, so the project work available is sitting increasingly on the public side of the market.
Source: Census Bureau
Power catches manufacturing as the factory boom unwinds
Manufacturing is no longer the largest non-residential category. At US$172.7bn SAAR in June it sits 21.4% below a year earlier, and power, at US$177.6bn and growing 3.5%, has passed it as chip and battery plants finish faster than new ones are approved.
Elsewhere the picture is mixed. Office is the standout, up 12.5 % to US$132.8bn and now larger than commercial, which fell 5.9%. Lodging dropped 9.1% and public safety 7.2%, while communication and amusement edged higher.
Infrastructure is growing steadily rather than quickly. Highway and street rose 2.9 % and transportation 2.2%, against 3.9% and 7.1% a year earlier. Civil work is still adding volume, but at a slower pace than the trades serving it have been planning around.
Source: Census Bureau
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