CRE This Week: US Construction Spending and Market Indicators

Total U.S. construction spending reached a seasonally adjusted annual rate of $2,172.4 billion in April 2026, marking a 0.4 percent increase from March. While private residential construction grew, private nonresidential spending saw a slight decline of 0.2 percent to $729.8 billion. These figures suggest a thinning supply pipeline, which may serve as a medium-term tailwind for occupancy and rent growth in the industrial and multifamily sectors.

The contraction in private nonresidential spending is largely driven by a sharp 18.5 percent year-over-year drop in manufacturing construction, which previously accounted for a significant portion of the market. In contrast, the office and lodging sectors showed resilience, with spending up 9.4 percent and 5.4 percent respectively on an annual basis.

Commercial and healthcare spending grew by less than 2 percent, indicating potential contraction in real terms when adjusted for inflation. The decline in manufacturing activity is attributed to the completion of projects supported by the IRA and CHIPS acts, signaling a shift in the industrial development landscape.