In January 2025, total construction spending in the U.S. slightly declined by 0.2% from December, reaching a seasonally adjusted annual rate of $2.19 trillion. Despite this monthly drop, spending remains 3.3% higher than in January 2024, with public construction outpacing private sector growth, according to the U.S. Census Bureau, March 3, 2025.
Private construction spending fell 0.2% from December, driven by a 0.4% decline in residential construction, which stood at $932.7 billion. The single-family sector saw a modest 0.6% increase from December but was still down 0.9% year-over-year, while multifamily construction continued its downward trend, falling 0.7% month-over-month and a steep 12% from a year earlier, signaling ongoing challenges in the rental housing market.
Public construction, in contrast, edged up 0.1% from December and surged 5.9% compared to January 2024. Transportation spending rose 7.1% year-over-year, while water supply projects saw a notable 15.9% annual increase. Highway construction also ticked up 0.6% from December but remains 2.1% below January 2024 levels.
The decline in residential spending aligns with the cooling housing market, likely impacted by elevated mortgage rates and affordability challenges. Multifamily's continued contraction suggests declining developer confidence, possibly due to rising financing costs and slowing rent growth, while the strength in public sector spending reflects ongoing infrastructure investments, particularly in water and transportation projects.
