Commercial Building Contractors NAICS 2362

Jun 6, 2025 - Nonresidential Construction Spending Drops

• The total value of nonresidential construction put in place decreased 0.1% in April compared to March, according to the US Census Bureau. Commercial construction spending led the drop in nonresidential building spending with a decline of 0.8%, followed by manufacturing (down 0.6%) and communications (-0.1%). Office spending was flat, while amusement and recreation and lodging saw gains of 0.7% and 0.1% respectively. Associated Builders and Contractors (ABC) Chief Economist Anirban Basu said, “Construction spending slipped in April as headwinds like trade policy uncertainty, high interest rates and tight lending standards continued to batter industrywide momentum. Nearly 22% of contractors reported tariff-related project delays or cancellations in April, and despite changes to certain import tax rates in May, policy uncertainty remains extraordinarily elevated.”
• Utilities and grid operators are grappling with a flood of speculative interconnection requests for data centers that may never be built, according to Utility Dive. Grid optimization software firm Camus Energy estimates there are between five and 10 times as many interconnection requests as the number of data centers being built. US data center load growth forecasts often diverge widely. A 2024 projection by the RAND Corporation estimated the AI sector would boost power demand by 347 gigawatts (GW) by 2030. In April 2025, Schneider Electric cited other sources that estimate growth will be less than 100 GW. Speculative requests by data center developers make it challenging for grid operators and utilities to plan for future power needs. To reduce the risks of overbuilding, some utilities are introducing standardized large-load interconnection processes, and others are requiring data center developers to shoulder more of the upfront costs. 6.5 months, offering a bit of a buffer if future project work continues to remain soft.”

• In late May, Immigration and Customs Enforcement (ICE) officers raided three construction job sites in New Orleans; San Antonio, Texas; and Tallahassee, Florida, according to Construction Dive. Some industry insiders told Construction Dive that increased jobsite immigration enforcement could disrupt project schedules and worsen the construction industry’s labor shortage. The Associated General Contractors of America (AGC) has been advising its members to expect an increase in jobsite enforcement, as it has estimated it would take about five months for the Trump administration to organize and ramp up enforcement. The Associated Builders and Contractors (ABC) trade group has suggested that its members ensure their workers are authorized to work in the US. The Trump administration claims that increased immigration enforcement is necessary to ensure national security and protect jobs for workers who can work in the US legally. The ABC says that for 20 years, it has called on Congress to pass a market-based merit visa program to allow more foreign workers to be employed in the US.
• North American construction and engineering spending in 2025 is expected to grow by 3% after increasing an estimated 7% in 2024, according to FMI’s second-quarter 2025 North American Engineering and Construction Outlook. Nonresidential building construction spending is forecast to be flat in 2025 as growth in amusement and recreation (+7%), transportation (+3%), public safety (+3%), and educational (+3%) is offset by weakness in commercial (-7%), lodging (-5%), and manufacturing (-1%). Amid high mortgage interest rates and a lack of affordability, single-family construction spending is forecast to rise by 3% in 2025. A recent jump in new apartment supply and unfavorable cost conditions will reduce multifamily spending by 12% in 2025.