Construction spending declines slightly in June

While construction employment grew by 2,000 jobs in July, spending on projects underway in June decreased 0.4 percent from May, according to an analysis of two new government reports that the Associated General Contractors of America (AGC) released Aug. 1. Association officials cite ongoing tariff and labor uncertainty as the reason many construction owners could be scaling back planned projects.

Spending totaled $2.14 trillion at a seasonally adjusted annual rate in June. The total was 2.9 percent lower than the June 2024 level.

Overall construction employment totaled 8.31 million, seasonally adjusted, in July. Employment rose by 96,000, or 1.2 percent, from July 2024 to July of this year. That gain was less than half as much as the increase of 200,000 jobs (3.1 percent) in the previous 12 months, Simonson says. (Details on employment in specific metro areas can be found here.)

Employment increased by 6,400 from June to July and by 114,400, or 2.4 percent, over 12 months at nonresidential construction firms—nonresidential building and specialty trade contractors, along with heavy and civil engineering construction businesses. That increase more than offset a decline of 4,400 employees for the month and 18,200 (-0.5 percent) over 12 months at homebuilders and residential specialty trade contractors, AGC says.

“Employment growth in construction has slowed over the past year as uncertainty about tariffs and labor availability have caused owners to delay, stretch out, shrink and cancel projects,” says Ken Simonson, AGC chief economist. “As more structures that broke ground in past years reach completion, it is likely that industry employment growth will taper off even more.”The construction spending total was dragged down by decreases in private residential and nonresidential projects, AGC says, which outweighed a small increase in public work. Private residential spending declined 0.7 percent in June and 6.2 percent over 12 months, while private nonresidential spending slipped by 0.3 percent for the month and 4 percent year-over-year. Public construction outlays rose 0.1 percent from May to June and 5.2 percent over 12 months.

AGC officials urged the Trump administration to continue completing trade agreements to provide greater tariff certainty. And they urged the administration to focus its immigration enforcement efforts on undocumented individuals who are engaged in additional criminal activity to avoid additional disruptions to construction and economic development projects.

“The more uncertainty there is, the less likely developers are going to invest in significant new construction projects,” says Jeffrey D. Shoaf, the association’s chief executive officer. “The more this administration can do to provide economic certainty, the more likely demand for construction will rebound.”