AGC: Construction spending inches up in March

Construction spending increased 0.6% from February to March as gains in residential construction and continued strength in select private nonresidential segments offset ongoing weakness in manufacturing activity and a slight decline in public construction, according to a recent analysis of government data by the Associated General Contractors of America.

Association officials also noted that ongoing economic uncertainty and rising costs continue to weigh on many private construction segments.

“The February and March spending data show that construction growth remains concentrated in a narrow set of categories,” Macrina Wilkins, AGC director of market insights, said in a news release. “Residential construction rebounded in March and investment tied to data centers and power projects continues to support activity, but several traditional nonresidential segments, including manufacturing and commercial construction, continue to lag.”

Construction spending totaled $2.186 trillion at a seasonally adjusted annual rate in March, the association reported. That figure is 0.6% above the revised February rate and 1.6% higher than the March 2025 level. Private construction spending increased 0.8% for the month and 1.0% year-over-year. Private residential construction climbed 3.6% compared to a year earlier, including a 2.7% monthly increase in single-family construction, although single-family spending remains 4.2% below year-ago levels. Multifamily construction edged up 0.5% year-over-year.

Private nonresidential construction slipped 0.2% for the month and 2.1% compared to March 2025. Manufacturing construction continued to weaken sharply, falling 17.0% year-over-year. By contrast, office construction, which includes data center activity, increased 9.1% over the past 12 months, while power construction rose 4.6%. Several other segments posted modest gains, including amusement and recreation, educational, and commercial construction.

Public construction spending decreased 0.2% for the month but remained 3.6% above year-ago levels. Highway and street construction increased 3.8% compared to March 2025, while transportation construction rose 2.5% and sewage and waste disposal construction jumped 9.7% year-over-year. Education construction spending inched up by 0.6% over the past year.

Association officials noted that much of the recent construction activity continues to be concentrated in a handful of segments, particularly data centers, power, and select residential categories, while manufacturing and several traditional private nonresidential segments remain soft. They added that although the March data reflect construction activity earlier this spring, contractors and project owners are continuing to navigate uncertainty tied to tariffs, elevated financing costs, labor shortages, and recent volatility in energy markets.

“Demand for data centers and related projects is providing a much-needed boost to overall construction activity,” AGC CEO Jeffrey D. Shoaf said. “Unfortunately, a growing number of local officials appear intent on undercutting that growth, and the high-paying construction jobs that come with it, by restricting data center projects.”