US construction spending drops in June, projected to decline further in 2026

U.S. construction spending fell 0.1% in June, missing economists’ expectations for a 0.2% rise. Year‑over‑year, spending was down 3.2%, with private residential construction slipping 0.3% and single‑family housing projects falling 0.6%. Multi‑family housing units declined 0.7%, while private non‑residential structures such as power plants and factories edged up 0.1% and factory projects dropped 1.2%. Public construction spending was unchanged, as were state, local, and federal government outlays.

A new outlook from Raleigh‑based consulting firm FMI projects total U.S. construction spending to shrink 1.3% to $2.214 trillion in 2026. Manufacturing construction is expected to plunge 17.4% to $178 billion, reflecting the end of a boom in semiconductor fabs and battery plants. Single‑family home construction is forecast to fall nearly 4% to $409 billion, while home‑improvement spending should rise 5.1% to $404 billion as homeowners tap equity lines. Office building investment is slated to grow 2% to $124 billion, and data‑center projects remain a bright spot amid a late‑cycle economic environment.