Fewer construction projects appear to be getting off the ground.
The latest construction spending numbers, released July 1st by the U.S. Census Bureau, showed that total spending in May was up just 0.1% from April and down 1.5% from May 2025. Additionally, private residential spending was up 1.8% year over year, though new single-family home spending was down 4%.
Maor Greenberg, co-founder and CEO of Spacial, an AI-powered structural engineering platform for residential construction, and a 19-year veteran of the construction and real estate industries, said the data aligns with broader spending trends showing that construction projects are beginning to slow.
- Worth watching: “Within the residential sector, the one figure worth watching is new single-family construction spending, which was down 4% from a year ago and down 6.3% year-to-date, before seasonal adjustment. It’s not a surprise. It’s a trend, and one that’s holding.”
- From noise to signal: “We are building fewer new single-family homes than we were a year ago, all while spending looks steady. So, affordability is getting worse and the middle class will feel it first. The year-over-year picture is what’s changed: Last month, the annual change was inside the margin [of error], so I thought it was merely noise. Now, though, it clears the margin. Total spending is down 1.5% from a year ago and down 2.7% year-to-date. It’s a real trend this time, not noise.”
- Manufacturing concerns: “Manufacturing spending is a data point I was keeping an eye on since last month and it was down 18.4% from a year ago in April—in May it was down 21.9%. Two readings in the same direction indicate that spending trends are worsening and show where companies think the economy is heading.”
- Looking to the fall: “The pipeline is down. Residential spending was at $930.2 billion, up 0.3% for the month, which is smaller than the margin of error, which is basically flat. One residential number clears the margin: New single-family spending, which was down 4% from a year ago. In April, that gap was closer to 3%. So it is widening and single-family is a forward-looking indicator. If there are fewer starts now, there will be fewer completions into fall.”
By Maor Greenberg, co-founder and CEO, Spacial
