U.S. construction spending rose more than expected in April as private investment in single-family homes, office projects tied to AI data centers and power facilities offset weakness in manufacturing construction.
By yourNEWS Media Newsroom
U.S. construction spending increased more than expected in April, supported by stronger single-family homebuilding and continued demand from sectors tied to artificial intelligence infrastructure.
The Commerce Department’s Census Bureau said Monday that construction spending rose 0.4% in April, twice the expected increase. The prior month’s initially reported 0.6% gain was revised down to 0.2%.
Private residential construction showed renewed strength, with spending on single-family homes rising 1.4% for the second consecutive monthly increase. Despite the monthly gain, single-family construction spending remained 2.9% below its level from a year earlier.
Residential real estate continues to face pressure from higher mortgage rates, which have climbed amid the war with Iran. Through the first four months of the year, single-family construction spending has run 5.6 percentage points below last year’s pace.
Private office construction, a category that includes AI data centers, rose 1% in April. Spending in that category was up 7.5% from a year earlier and 8.3% higher during the first four months of the year compared with the same period last year.
Power-related construction also increased. Spending on power facilities, including electrical generation and the storage and distribution of crude oil, rose 0.6% in April. The category was up 6% from April of last year and 5.6% higher year to date.
Together, office and power projects accounted for about one-third of the total private-sector spending increase, underscoring the role of AI-related infrastructure and energy investment in supporting construction activity.
The largest drag came from manufacturing construction, where spending fell 1.2% in April. Manufacturing construction was down 18.5% from a year earlier and 17.9% lower year to date.
The decline reflects a cooling from the post-pandemic boom in factory construction, which had been fueled by inflation, CHIPS Act subsidies and green energy spending under the Biden administration. Even with the pullback, manufacturing construction spending remains more than twice its pre-pandemic level.
Government construction spending rose 0.4% in April. Public-sector gains were supported by increased spending on streets and highways, public safety facilities and educational buildings.
The April figures showed a construction sector increasingly shaped by diverging trends: renewed homebuilding momentum, strong AI and power-related investment, weaker factory project spending and steady public infrastructure outlays.