Construction spending has been in a huge downtrend for a year. 
The Census Department Construction Spending Report for May repeats the same story, down again.
Total Construction
- Construction spending during May 2025 was estimated at a seasonally adjusted annual rate of $2,138.2 billion, 0.3 percent (±0.8 percent) below the revised April estimate of $2,145.5 billion.
- The May figure is 3.5 percent (±1.3 percent) below the May 2024 estimate of $2,215.4 billion.
- During the first five months of this year, construction spending amounted to $841.5 billion, 2.1 percent (±1.0 percent) below the $859.6 billion for the same period in 2024.
Private Construction
- Spending on private construction was at a seasonally adjusted annual rate of $1,626.6 billion, 0.5 percent (±0.5 percent) below the revised April estimate of $1,634.2 billion.
- Residential construction was at a seasonally adjusted annual rate of $888.9 billion in May, 0.5 percent (±1.3 percent) below the revised April estimate of $893.7 billion.
- Nonresidential construction was at a seasonally adjusted annual rate of $737.7 billion in May, 0.4 percent (±0.5 percent) below the revised April estimate of $740.6 billion.
Public Construction
- In May, the estimated seasonally adjusted annual rate of public construction spending was $511.6 billion, 0.1 percent (±1.5 percent) above the revised April estimate of $511.3 billion.
- Educational construction was at a seasonally adjusted annual rate of $111.8 billion, 0.2 percent (±2.1 percent) above the revised April estimate of $111.6 billion.
- Highway construction was at a seasonally adjusted annual rate of $143.2 billion, 0.3 percent (±4.6 percent) below the revised April estimate of $143.7 billion.
Construction Spending Detail
Construction spending generally peaked a year ago, in May of 2024. Nonresidential peaked earlier but public spending is still rising.
Construction Spending Commercial and Manufacturing
Commercial and manufacturing construction spending are only 5.6 percent and 10.6 percent of total construction spending respectively.
However, new stores and new manufacturing facilities provide permanent jobs. Commercial is an outright disaster.
Percent Change from Year Ago Not Seasonally Adjusted
- Total: -3.7 percent
- Private: -5.5 percent
- Nonresidential: -1.4 percent
- Residential: -6.5 percent
- Commercial: -10.2 percent
- Public: +2.6 percent
Construction Spending Month-Over-Month
Construction Spending M/M Amusing Details
- Total: Up once in 12 months
- Private: Up zero times in 12 months
- Nonresidential: Up three times in 12 months
- Residential: Up once in 12 months
- Commercial: Up three times in 12 months
- Public: Up 8 times in 12 months
Related Posts
June 18: 2025: Housing Starts Plunge 9.8 Percent to the Lowest Level in 5 Years
The homebuilders have spoken. And they don’t like what they see.
June 20, 2025: Did the Fed Just Predict a Recession for Later this Year?
The Fed does not “predict”, but its GDP projections say “yes”.
June 23, 2025: Existing-Home Sales Rise 0.8 Percent in May, Inventory Soars
Existing home sales rose but flounder at low levels. Rising inventory will eventually impact prices.
June 24, 2025: Home Prices Decline for the Second Month but It Doesn’t Even Register
Case-Shiller home prices fell 0.3 percent in April.
June 27, 2025: Personal Income and Spending Unexpectedly Decline in May
Economists missed the boat by a mile on income and expenditures.
Between July 1973 and Jan 1974 (Yom Kippur war) DXY ranged between 94 and 110. It dropped to 89 in Oct 78, before rising to 165 in 1985. When DXY rises commodities slump. DXY is in a trading range since Mar 2015. It might drop further, before rising between 122 and165. In dollars we trust. The end of the dollar is bs.
TINA at this time…..
In other news:
The first shipment of LNG from our former ally Canada is headed for Asia.
This information is from The Oil and Gas Journal which is also a good read.
It is truly amazing how many nations are exploiting their onshore and offshore natural gas resources and how many gas and oil resources are being discovered
Just in time as the Permian Basin is hitting peak production.
Good thing we took over Iran and have Iraq under our thumb!
Iran might strike back when Trump is gone. They might shut the strait of Hormuz
to punish the west.
Then again they might not. Hard to know when you are basing what might happen on vapor, eh?
It’s a valid option. The Ayatollah, a stubborn old man, wasn’t evaporated. Big mistake. Yom Kippur war restored Egypt honor after the Six Days War defeat. Egypt II army was saved from general Sharon chokehold, bc of international pressure. Egypt built the Oct bridge in Cairo and Oct city nearby. “Restoring our national honor” and “Free Taiwan” are in China’s PRC creed. So far Xi is flexible. He bent the creed. But the PRC creed wasn’t evaporated.
Hopefully, Israel won’t start another war with Iran they can’t finish without begging for America.
Yeah RIP Permian Basin even as it increased natural gas production by 2.6 billion cubic feet per day in 2024 compared to 2023. Also, the US flares/vents almost 1 billion cubic feet per day of gas.
This picks up, wages will rise since nixing many slave laborers. Jerry said price of money / rates do not control RE over the long run. Hmmm. Drop rates, see what happens.
Slavery on the rise. Trump to Shingle Mums with kids: I am not the fathers of your kids. Let their real fathers pay. Gavin will save CA and himself. NYS new gov: Mamdani will not have the money.
Gavin’s political career is over. He is not electable outside of the odorous bubble that is Kalifornia.
Great !
Wages will rise and the real value of RE will deflate. When Price/Rent will deflate enough RE construction will rise again to attract young families with new needs and tastes. Zoomers don’t care about boomers RE. It’s a systemic change.
– Construction spending has been in a huge downtrend for a year.
> Makes perfect sense, as we can’t find enough people to buy or rent what’s already been built. We continued to build more, under false pretense that we would have Millions upon Millions of new occupants from all over the World, as we watched them stream in under Democrat Leadership. They were even promised housing, along with Education, Healthcare Etc., if they came, so they came is droves.
– Construction Spending M/M Amusing Details
Total: Up once in 12 months > To be totally expected.
Private: Up zero times in 12 months > No Private Money is being spent on Building overall. Occupants are not there, and neither is the money.
Nonresidential: Up three times in 12 months (Specific Builds)
Residential: Up once in 12 months > No Money to buy what’s already been built.
Commercial: Up three times in 12 months > Borrowed money to build, but some will go broke paying it all back, if they even can.
Public: Up 8 times in 12 months > Public is always busy, as “Printed Money” never goes away…
Interesting as California rolls back environmental laws, seemingly a gold rush for developers.
Higher min wage along with reductions in SNAP and other state’s gov benefits makes CA a leader of a new conservative trend.
Or Broke with No Choice is another explanation, and probably much closer to the truth.
In 2020 Trump/JP sent $10,000 to Shingle Mumps with kids in CA, NY and TX. The BBB will be ugly for those on SNAP and gov goodies. More people seeking low paying jobs, competing with new immigrants in the black market. The top 20% of income get a booster. One out of five pay $1,000/m in car loans. Some people are selling their ass to pay rent. Slavery will rise.
Yes, let’s blame the problems on the immigrants and those lazy poor and working class that have laid the disastrous policies because they control Wall Street, the FED, Washington D.C., the S&P 500 CEOs, the board of directors and other senior management positions. etc.
They’ll be a new country soon.
Simply CA. Style of giving voters what they crave on paper, and in promises, only to have the rug pulled out once again, or the classic Lucy pulling the football out as they try to kick it. Either one applies to CA. Politics.
Gavin is Lucy, the money earners are Blockhead, and the peasants are the ones being taken advantage off. Oh, and those illegals, which get most of what the money is spent on in CA.and that’s Free Food, Places to Live, Phones, Money, healthcare, Transportation, Eye care, jobs (no show), and an assortment of other goodies, freebies, etc.
This happens with the Government Employees as well. They get all sorts of preferential treatment, for playing along.
Once in this club, you’re protected, unless they need a scapegoat for something, or can’t explain it away, so they blame them for it. You’re only as good as what you provide, and not need or ask for. Sit quietly, cash your checks, play along, and you will be rewarded, or we will hang you out to dry, in a second, if you are no longer useful or refuse to play along.
At $1,000/s.f. to build, around LA not much building likely to occur. Palisades and Altadena are still a pile of ash and will take years to come back.
In China RE construction was 30% of the GDP. In the US it’s 7% of the GDP.
If there is nothing else construction collapse in China is much more severe than in the US. In the US trillions are pouring into the industrial sector. In a dynamic economy construction will not collapse. It might rise to a new all time high. A good economy lift all wages and all sectors.
Looking at the graph of construction, in the GFC, real estate spending fell for 5 years. The situation is probably worse this time. FHA has been giving our loans with 0 to 3.5% down, with payments of 50% DTI. Most borrowers will fail given those stats. There are about 8 million mortgages like that and 45% of them have student loans, that now must be paid again. Prime buyers are suffering too. Inflation the past 5 years has increased insurance, taxes, HOA fees, repair and maintenance costs.
A lot of people are struggling and will not rebound fast. We are just getting to the start of a recession. How big will the Fed QE response be this time? Every time they do that an inflationary spike occurs.
Yes voters should be aware that voting for Republicans and Democrats is voting for a minimum 2% inflation target and all the other bad stimulus like zirp, QE, fed “buying” mbs with money printing, huge debt and debasement of the dollars value. 99% of people vote for the uniparty but a lot more than 1% of people complain about inflation which shows they are misinformed.
OK and yet the markets are hitting new highs.
You offer a bunch of data points. What is the conclusion you want to draw going forward?
Would lowering interest rates change all these figures for the “better’? Or what?
“CA Republicans Urge Amnesty For Illegal Immigrants”www.zerohedge.com/political/ca-republicans-urge-amnesty-illegal-immigrants
…
… and yet, it’s a State with supposedly a high minimum wage.
In a world where the leadership is so unpredictable and you never know what tariff policy or if workers will be available, it is unwise to start new projects. Even projects that were underway are threatened and slowing quickly from the draconian deportations of anyone that is not caring “Their Papers”.
<
“Your papers please”
Random search and seizure.
What about the AI farms that are supposed to replace everything? One would to believe, there is runaway boom in construction.
construction? collapse? pfft we are more concerned with: Charlie Kirk condemns Zohran Mamdani for how he “disgustingly” eats rice: “We in the West value cleanliness. We have utensils.”And how do Americans eat fried chicken legs?
The rate of construction activity can come down quite a lot, just to reach the 2019 levels, before all the Covid and War madness. We are in the middle of a 1928-style liquidity boom, for a bunch of interesting reasons. But yes, this Zohran Mamdani fellow has been getting a lot of coverage. It’s pretty hilarious, really. I mean, haven’t we all been trying to sieze the means of production? I work at it every day. Does not everyone? Socialism is a perfect fraud – the ideal complement to Trump’s spectacular frauds. It’s all become Theater-of-the-Extreme. I thought we might get to Mars. Instead, we have continuous cage-matches. This boom-run will continue for a while longer. We have to get everyone long, and all-in margined. Then the collapse will not be slow-motion.
Charlie Kirk is a thirty something nobody. His opinions are worthless.
86/47
Soon to be lower interest rates should improve the housing market. Refinancing that also occurs free up monthly consumer income to be spent elsewhere. I don’t think we have a lack of capital among the investment class, it’s the consumer. The FED has been battering the consumer class for decades now combined with the hollowing out of our economy by all of the offshoring of labor. I do not expect an Economic boom here just stagnation. It’s becoming apparent that any gains from AI are going to be used to create a more dystopian society with any gains accruing to our tech overlords and their minions..
So you’re in the camp that says Trump’s tariffs are going to have little effect on CPI?
“Refinancing that also occurs free up monthly consumer income to be spent elsewhere.”
It will be spent on the higher prices everyone will be paying for everything.
The Fed has been battering the middle class since 1913. Not for decades. For the last 111 years and 7 months.
You are right about the dystopian society. But the Fed and their dishonest money have a lot to do with that.
As sad as it is to say, it’s very possible the middle class is an aberration of society and not normality.
You say the Fed has been battering it since 1913 and yet it didn’t really exist until the 20th century and then really only in a few select Western countries after the rise of industrialization / fossil fuels. Prior to that society was just a few rich people (historically born to the station like Barons/Dukes etc but think Robber Barons in America in the 1800s and beyond) with the rest being working poor.
So it’s possible society is just going back to normal after a brief aberration.
Wasn’t 1913 part of the 20th century?
Most definitely is.
But the middle class in America really came to prominence after WWI and especially after WWII (prior to that almost everyone was a rural farmer).
Who would trade places with the Duke and Duchess Of Sussex?
That could be.
I think the middle class was formed by the veterans of the World Wars.
Here are some examples of revolutions and rebellions throughout history that involved significant participation from the lower classes:
Classical Antiquity:
Middle Ages:
Modern History:
Generated by AI, surprised it didn’t list 1776 American Colonies.
Well, your tech overlords may be living on Mars!
But they can boss us from there.
“The Slow-Motion Collapse of Construction Spending”
That’s a very overstated title. The collapse comes as we enter a recession.
These slow downward sloping curves are not construction collapsing. With the massive build out that happened through mid 2024 construction spending has to slow at some point which it’s doing, especially with interest rates much higher than the construction industry wants.
So will this modest slowdown in construction lead us into a recession like it usually does? Well, if you head over to that Wolf guy, he just posted his latest labor market update. I’ll spare you the read:
“Recession stays on the backburner.”
Again, construction always leads us into a recession. Unfortunately, we might have arrived at the point with so many illegals working in the construction industry that layoffs which are an early indicator of an impending recession just aren’t going to show up in the numbers like they usually do.
I know this report deals with spending, but spending & jobs are certainly correlated.
The people should also watch for disproportionately low layoffs in the hospitality industry.
Most of the illegals in construction are doing grunt work (carrying stuff, moving earth with hand shovels, cleaning up the site, applying coatings etc). That’s because it doesn’t pay enough to attract anyone (these used to be the jobs filled by high school or college kids in the summer as I did a summer of that grunt type work one summer in college) full time nor does it require any real skills.
The truth is you only need a few skilled legit workers in each profession (plumber, electrician, bricklayer, floor guy, roofer etc) and the rest are grunts who aid them.
Is everything you write intended to be the exact opposite of the truth?
Which part of what I wrote is the opposite of truth?
I most definitely worked a summer doing grunt construction work in college. I wasn’t the only one doing it either. They employed lots of us.
I live in Florida now and you see these guys all over the place. Most Home Depots or Lowes parking lots have guys hanging around at the edge of them who are more than willing to come to your place and help with any job you need done for some cash. Jupiter, Florida (right near me) enacted an anti solicitation ordinance a few years ago prohibiting the hiring of day workers off the street by fining you for doing it. Local construction companies come by all the time and get these guys for a day of grunt work.
Well, with Florida’s tough employment of illegals, then that state may be shifting to what you’re talking about which is GREAT!
Here in GA, they’re still doing a lot of the work in EVERY residential construction trade known to mankind.
It’s far from grunt work.
High Fives for DeSantis. I’ll have to think long & hard to pass him up over Vance. Both should be excellent presidential candidates.
So without the “grunts” then the “skilled” workers wouldn’t be able to get anything done.
At least in your telling.
Absolutely. I didn’t say the grunts were useless. Far from it. We need plenty of them.
The guys who look like they are just working in the dirt are making sure the foundation is level and square, and that the steel is strategically placed to provide appropriate tension.
They are making sure that the form boards are where they should be, and that they are braced to withstand the weight of the wet concrete.
These guys do some of the most crucial work.
By your logic, one day the only important person in construction is the Real Estate Lady who makes all things possible.
You can always tell someone who has never built anything.
– The truth is you only need a few skilled legit workers in each profession. > I would have to agree, with one big exception from experience.
– plumber > Need the License, but the work can be done by virtually anyone, overseeing it of course.
– electrician > See Plumber
– bricklayer > No experience, but sounds like grunt work.
– floor guy > See Bricklayer.
– roofer > Need the skill set or you won’t make much money. My brother owned a company. I worked on weekends with him. It’s all about speed of laying and nailing. You need the younger learners for grunt, but a lot is done mechanically now. The grunts need to learn the work or they get replaced quickly.
Spot On for the most part!
Almost all growth was non-productive residential.
Commercial, manufacturing, and office received some breadcrumbs.
The future is bright.
That top chart shows how much construction took off once free money from Covid started (from the grey bar in early 2020). It’s almost as if ZIRP interest rates combined with massive amounts of helicopter money got every construction job imaginable green lighted.
If the peak in 2006 is any indicator of the future it says it’s going to be years (think 2030) to unwind this mess just like everything else thanks to all the money sloshing around.
You definitely want to execute your exit strategy before 2030. Thats the same year all the boomers can sign up for socialism too.
you ought to read harry browne’s “how i found freedom in an unfree world”. one can hide in plain site, or move to a jungle, or move to New Zealand the antipode of imperial cities of DCNYC
Look what they did to medicine, and now all of these other approved, without test medicines, coming to the forefront, thanks to lax laws, or just not followed via crisis, or something like that… Covid did a lot more har than what was believed to be upfront. Now its all becoming uncovered, and it’s a nightmare by the looks of things…
The Big, Beautiful Bill will help keep the construction party going for a little while, perhaps through the next election. Construction will likely not collapse. Judgement day is postponed. Trump successfully kicked the can down the road a little further.
Yes Judgment day will still come. May be even worse in the future than it would be now, but there’s all kinds of ways to postpone or delay it. Lot’s of ways we can do this. We can win the temporarily paused war with Iran, steal their oil like we did in Libya, and then maybe eventually take over Russia which has lots of wealth and natural resources we can exploit. That seems to have been the plan since the demise of the Soviet Union. We did it before with the Bolshevik Revolution. Western Banks ended up with most of Russia’s 1311 tons. We did it with the Oligarchs who assumed much of Russia’s wealth after 1991. Putin spoiled that party, but we are persistent.
The Ukrainian conflict is just getting started. There will be no peace with Russia-ever-maybe ceasefires, but Russia is in our sights. We can do a few more coups and start a few more wars to weaken the BRICS. The Banksters, Globalists, Illuminati-whatever you want to call them-are not about to throw in the towel or make peace-with anyone. They intend to win. Only nuclear war will spoil this party-something very possible, if not probable if you believe Dmitri Medvedev and a lot of people in Russia these days. So is Trump the Peace President? I had hoped so a month or so ago, but not so much anymore.
I will leave you with the words of the recently deceased, infamous Neocon Michael Ledeen: “Creative destruction is our middle name, both within our own society and abroad. We tear down the old order every day, from business to science, literature, art, architecture, and cinema to politics and the law. Our enemies have always hated this whirlwind of energy and creativity, which menaces their traditions (whatever they may be) and shames them for their inability to keep pace. … They must attack us in order to survive, just as we must destroy them to advance our historic mission.”
“take over Russia” is a take that suggests to me you couldn’t find Donbass on a map before 2022
I actually had numerous contacts with Donbass Cowboy Russell Bentley for several years prior to 2022. If you knew what you were talking about you would not make such an ignorant comment. Zbig’s The Grand Chessboard laid it out many years before that. Russian historians and commentators frequently speak of this plan to divide Russia into 5-7 countries, especially since the long planned and provoked Ukrainian war began in 2022.Learn your history. Take a break from FoxNews for a while.
That’s not fair. He listens to both sides…. Fox AND Newsmax.
Even Brzezinski himself repented of his Grand Chessboard strategy as he faced his particular judgment. Russia will nuke DC before they get taken over. I almost wish they’d do it now. Just a few tacticals to take out Langley, Foggy Bottom and the Utah Data Center.
I remember Brzezinski sounding quite reasonable and likable on his many FoxNews appearances in the last few years before his death. I believe he may have had a change of heart and conversion near the end of his life.
I dont think the US is capable of defeating Russia or Iran right now. They both have allies. We cant steal anyones oil. Their people will fight to defend it. US citizens, already reeling from inflation shock, wont stand for their soldiers dying in mass overseas so the US govt could try and steal oil. Our soldiers are brave but despite the huge defense spending, our military as well as our country arent very strong right now. Thats why we deficit spend trillions in peacetime trying to keep things afloat, but that is actually further weakening us and makes the eventual reckoning worse.
Sure hasn’t taken taco very long to change the course of a stronger economy.
Construction been baked into the cake for a year now as the charts show. That’s long before Trump came into office.
Last summer was when there were a lot of signals saying the economy had peaked and we were moving into a recession. For a full year construction has clearly been in one.
“Last summer was when there were a lot of signals saying the economy had peaked”
Please list a few with sources.
Thanks!
How about Mish’s own blog
https://mishtalk.com/economics/a-second-quarter-recession-this-year-looks-increasingly-likely/
This article links to other reports since Mish always links to sources.
Wait just a damn minute. Are you talking about the 2nd quarter that ended yesterday and THERE WAS NO RECESSION?
OMG! This is worse than I thought. See my point above about how completely & consistently off base you are.
Did you even click on the link and take a look? It’s dated June 5th 2024.
Also I didn’t say recession. I said economy had peaked. You can have a long meandering no growth that’s neither recession or growth.
No, I didn’t read the article. If it was talking about Q2 2024 then it’s even worse, because that’s more than a year ago. Mish was saying back in late 2023 that the US was in a recession. Fortunately, he doesn’t say that anymore. He’s a little more nuanced which is fine. I think we all can agree that pockets of the economy are either in what seems like a minor recession or very borderline. However, on aggregate, the economy remains fairly resilient.
in 2023 i knew zero people out of work, that wanted work. in summer of 2025 i’m hearing people whose bosses are missing payroll. i have not had a “job” in 30 years. unless you call stock and FX punting for myself a “job”.
For a while I was hoping he’d have that Chauncy Gardner idiot luck. It’s what got him where he is, after all, but apparently it doesn’t apply to the country he’s running.
Turns out petulant, vindictive stupidity at the highest level of government isn’t very good for the population. As a member of the population, this concerns me.
Thumbs up for the Chauncey Garner reference that I bet 99% of readers here don’t get.
You should have gone with Forrest Gump if you wanted more people to get the reference.
It’s Gardiner. Good character, but an interminably slow movie – even for its day. Best scene (paraphrasing) – an obvious swish asks Chauncey if he’s ever had sex with a man. His reply: “I don’t think so.”
i like this much better. “Upper Class Twit of the Year” is a comedy sketch that was seen on the 1970 Monty Python’s Flying Circus episode “The Naked Ant” (series 1, episode 12), and also in a modified format as the finale of the movie And Now for Something Completely Different. It is notable for its satire on dimwitted members of the English upper class. Its title is a reference to the Horse of the Year Show, because equestrianism is often regarded as an upper-class pursuit in the UK.
The trump boys would absolutely dominate Upper Class Twit of the Year!
Was hoping get people to look it up and watch it. That and “A Face in the Crowd” are incredibly relevant right now.