U.S. construction spending rises 0.6% in March led by residential gains

WASHINGTON — U.S. construction spending increased 0.6% from February to March as gains in residential construction and data center-related projects offset continued weakness in manufacturing and other nonresidential segments, according to an analysis by Associated General Contractors of America.

Total construction spending reached a seasonally adjusted annual rate of $2.186 trillion in March, up 1.6% from March 2025.

Private construction spending increased 0.8% for the month and 1.0% year over year. Residential construction spending rose 3.6% compared with a year earlier, including a 2.7% monthly increase in single-family construction. Multifamily construction increased 0.5% year over year.

Private nonresidential construction declined 0.2% for the month and 2.1% from March 2025. Manufacturing construction fell 17.0% year over year.

By comparison, office construction, which includes data center projects, increased 9.1% over the past 12 months while power construction rose 4.6%.

“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,” said Macrina Wilkins.

Public construction spending declined 0.2% for the month but remained 3.6% above year-ago levels. Highway and street construction increased 3.8% from March 2025, while transportation construction rose 2.5%. Construction of sewage and waste disposal facilities increased 9.7% year over year.

Association officials said contractors and project owners continue to face uncertainty related to tariffs, financing costs, labor shortages and energy market volatility.

“Demand for data centers and related projects is providing a much-needed boost to overall construction activity,” said Jeffrey D. Shoaf. “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.”