National nonresidential construction spending increased 0.3 percent in February, according to an Associated Builders & Contractors (ABC) analysis of U.S. Census Bureau data.
On a seasonally adjusted annualized basis, nonresidential spending totaled $1.255 trillion.
Spending was up on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending increased 0.4 percent, while public nonresidential construction spending was up 0.2 percent in February.
“Nonresidential spending rebounded in February, rising to the highest level on record,” says Anirban Basu, ABC’s chief economist. “A surge in highway and street spending accounted for more than 40 percent of the monthly increase, and public sector nonresidential spending is now up more than 6 percent on a year-over-year basis. Unfortunately, private sector spending has not kept pace and is up just 2.5 percent since last February, a rate of increase slower than economywide inflation.”
Basu adds that private sector construction will continue to be impacted by high interest rates, tight lending standards and uncertainty surrounding trade policy.
“Despite these ongoing headwinds and the expectation that materials prices will rise as tariffs are implemented, contractors remain optimistic about their prospects over the next six months, according to ABC’s Construction Confidence Index,” he says.
Construction employment
The construction industry had 264,000 job openings on the last day of February, according to an ABC analysis of the U.S. Bureau of Labor Statistics’ Job Openings & Labor Turnover Survey.
Industry job openings increased by 22,000 in February but are down by 165,000 compared to February 2024.
“Construction industry hiring continued to pick up in February, accelerating to the fastest rate since the first half of 2024,” Basu says. “However, industrywide job openings remain subdued compared to this time last year. Still, there are signs that construction workers retain outsized leverage compared to their employers. Contractors remain reluctant to lay off workers, while construction workers quit their jobs at the fastest pace since last May.”
Adds Basu: “With contractors optimistic about expanding their staffing levels over the next six months, according to ABC’s Construction Confidence Index, the pace of hiring should continue to accelerate through the middle of 2025.”
Related: Report: Construction Backlog Indicator dips, contractor confidence up