US Census
Total Construction
Construction spending during May 2025 was estimated at a seasonally adjusted annual rate of $2,138.2 billion, 0.3 percent (±0.8 percent)* below the revised April estimate of $2,145.5 billion. The May figure is 3.5 percent (±1.3 percent) below the May 2024 estimate of $2,215.4 billion. During the first five months of this year, construction spending amounted to $841.5 billion, 2.1 percent (±1.0 percent) below the $859.6 billion for the same period in 2024.
Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $1,626.6 billion, 0.5 percent (±0.5 percent)* below the revised April estimate of $1,634.2 billion. Residential construction was at a seasonally adjusted annual rate of $888.9 billion in May, 0.5 percent (±1.3 percent)* below the revised April estimate of $893.7 billion. Nonresidential construction was at a seasonally adjusted annual rate of $737.7 billion in May, 0.4 percent (±0.5 percent)* below the revised April estimate of $740.6 billion.
Public Construction
In May, the estimated seasonally adjusted annual rate of public construction spending was $511.6 billion, 0.1 percent (±1.5 percent)* above the revised April estimate of $511.3 billion. Educational construction was at a seasonally adjusted annual rate of $111.8 billion, 0.2 percent (±2.1 percent)* above the revised April estimate of $111.6 billion. Highway construction was at a seasonally adjusted annual rate of $143.2 billion, 0.3 percent (±4.6 percent)* below the revised April estimate of $143.7 billion.
Dodge Momentum Index Expands 7% in June
Data centers, warehouses, and recreational projects drove gains
The Dodge Momentum Index (DMI), issued by Dodge Construction Network, grew 6.8% in June to 225.1 (2000=100) from the downwardly revised May reading of 210.9. Over the month, commercial planning grew 7.3% while institutional planning improved 5.7%.
“Nonresidential planning steadily improved in June, alongside strength in warehouse, recreational, and data center planning,” stated Sarah Martin, associate director of forecasting at Dodge Construction Network. “Planning momentum in other key sectors – like education, hotels, and retail stores – was more subdued. Expectations for weaker consumer spending and travel demand, as well as volatility around funding, are likely contributing to the weaker momentum of projects entering the planning queue for those sectors.”
Warehouse activity gained substantive momentum in Jue, and data center planning levels remain robust. On the institutional side, large recreational projects propped up the month-over-month gain, while healthcare planning momentum continued to accelerate. In June, the DMI was up 20% when compared to year-ago levels. The commercial segment was up 11% from June 2024, and the institutional segment was up 46% after a weak June last year. If all data center projects between 2023 and 2025 are excluded, commercial planning would be up 12% from year-ago levels and the entire DMI would be up 23%.
A total of 40 projects, valued at $100 million or more, entered the planning phase throughout June. The largest commercial projects included the $500 million Meadow Brook Technology Park Data Center Campus in Middletown, Virginia, the $300 million Project Blue Data Center (Phase 3) in Tucson, Arizona, and the $300 million Data City Data Center in Laredo, Texas. The largest institutional projects to enter planning were the $340 million Cleveland Clinic Avon Campus Expansion in Avon, Ohio, the $150 million McKinney Amphitheatre Building (Phase 2) in McKinney, Texas, and the $135 million Harold Simmons West Overlook Park Buildings in Dallas, Texas.
The DMI is a monthly measure of the value of nonresidential building projects entering the planning stage, which has been shown to lead construction spending for nonresidential buildings by a full year.
ABC: Construction Adds 15K Jobs in June |
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 The construction industry added 15,000 jobs on net in June, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has increased by 121,000 jobs, or 1.5%.
Nonresidential construction employment expanded by 9,200 positions on net, with growth registered in just 1 of 3 major subcategories. Nonresidential specialty trade added 12,400 jobs, while heavy and civil engineering and nonresidential building lost 2,800 and 400 jobs, respectively. The construction unemployment rate fell to 3.4% last month. Unemployment across all industries declined from 4.2% in May to 4.1% in June. “Virtually every economist has been waiting for indications of stagflation,” said ABC Chief Economist Anirban Basu. “The wait continues. June’s employment report, coupled with recent inflation data, indicate that the U.S. economy continues to demonstrate solid momentum, stable unemployment and declining inflation. Construction added jobs for a second consecutive month. “While many will cheer this jobs report, some construction firm leaders may not be among that group,” said Basu. “While abating fears of recession are comforting, these data effectively slammed the door shut on a July Federal Reserve interest rate cut. A growing fraction of contractors is experiencing weakness in backlog as projects are postponed in an uncertain economic environment coupled with stubbornly elevated borrowing costs. “At the same time, construction materials prices have begun to edge higher, in part because of substantial tariffs on steel, aluminum, Canada, Mexico and China,” said Basu. “All things equal, that will drive up construction delivery costs, render more projects uneconomical and diminish contractor margins. Shifting immigration policy stands to reinforce these dynamics. Close attention should be paid to the profit margins component of ABC’s Construction Confidence Index in the coming months, which should reflect how these higher costs are affecting contractor operations.” |
ABI May 2025: Despite persistent softness, fewer firms report declining billings
Architecture firm billings continued to decline in May
The modest uptick in the AIA/Deltek Architecture Billings Index (ABI) score to 47.2 for the month means that fewer firms reported a decrease than in April. In addition, inquiries into new work increased this month for the first time since January, reflecting the modest degree of stabilization in the economy recently. However, the value of new signed design contracts continued to decline, indicating that while clients are starting to explore new projects, they remain hesitant to sign a contract committing to them.
Business conditions remained soft at firms in all regions of the country in May, although firms located in the South came close to reporting growth. The pace of the decline in that region has slowed over recent months, and firms in that region may be the first to experience growth again. However, firms of all specializations reported declining billings this month, although the pace of the decline slowed at firms with a multifamily residential specialization. Firms specializing in that type of work, as well as in institutional work, look like they’ll be the first ones to turn the corner to growth when conditions start to improve.
Economic activity continues to decline across much of the country
Overall conditions were mixed this month in the broader economy. In the latest edition of the Federal Reserve’s Beige Book report, released on June 4, respondents reported that overall economic activity declined across the country over the previous few weeks, with six districts reporting declines, three reporting flat conditions, and three reporting slight growth. New home construction was generally flat or slowing, although there were slight increases in some areas, like the Cleveland district. Nonresidential construction activity slowed in the Boston, New York, Cleveland, Minneapolis, and San Francisco districts, but was flat in the Minneapolis district and increased slightly in the Chicago district, due to demand for data centers and medical offices.
In addition, nonfarm payroll employment added 139,000 new positions in May, just below the average monthly gains of the previous 12 months. And architectural services employment ticked back up slightly in April (the most recent data available), adding 900 new jobs. Employment in the industry has fluctuated up and down for most of the year, but remains below the higher levels of early 2024.
Most architecture firms track design staff chargeability/utilization rates
This month, we asked architecture firm leaders for more information on how they use data on staff chargeability/utilization rates at their firm. Overall, nearly three-quarters of responding firm leaders (72%) reported that they track chargeability/utilization rates for design staff at their firm. This share was significantly higher at large firms, where 91% of firms with annual billings of $5 million or more reported tracking this information, versus just 15% of firms with annual billings of less than $250,000, and 49% of firms with annual billings of $250,000 to $1 million. Of the remaining firms, 22% reported not tracking this information, and 6% reported that this data was not applicable because they are a sole practitioner or for some other reason.
At the firms that track design staff chargeability/utilization rates, nearly all of them (83%) indicated that they have a target/budgeted chargeability/utilization rate for design staff this year. On average, the targeted/budgeted chargeability/utilization rate for design at firms this year is 77.5%, although some firms reported a target rate as low as 58% and others reported a target rate as high as 95%.
Firms that track this data also reported that current chargeability/utilization rates for design staff are, on average, the same currently as they have been in recent years (44% reporting) or are now lower (43%). Just 13% of responding firm leaders indicated that chargeability/utilization rates for design staff are higher now than in recent years.
Finally, we asked firm leaders how they use design staff chargeability/utilization rate data at their firm. More than two-thirds (70%) reported using the data to determine whether design staff are over-/underworked, and 65% use it to determine staffing adjustments (e.g., laying off underperforming staff, shifting under-utilized staff to other teams/projects). An additional 52% use the data to determine project assignments, 51% to determine hiring needs, and 38% to determine service fees. A smaller share of firms report using the data to determine design staff bonuses, raises, promotions, and benefits, and several responding firm leaders wrote in that they use it to help determine firm profitability.
