U.S. Manufacturing Construction Weakest Among Sectors

U.S. President Donald Trump has been championing tariffs to protect and bring back U.S. industries, especially in the manufacturing space. However, as of May 2026, there has been no indication that manufacturing activity is to pick up in the country. To the contrary, the sector was actually where the biggest decrease in construction spending occurred over the course of a year. Almost 22 percent less was spent on manufacturing construction in May 2026 than in May 2025 on an annualized basis, according to the St. Louis Fed. In comparison, total U.S. construction spending more or less flatlined, as did residential construction spending. Commercial construction expenses were down by 6 percent year-over-year in May.

The Wall Street Journal first reported the U.S. manufacturing construction dearth and said that a flurry of datacenter construction was actually one of the few upsides to construction spending in the country. This smaller sector, making up 8 percent of private, non-residential construction spending, saw an increase of 23 percent. But this remains a drop in the bucket as manufacturing despite declines is still responsible for a quarter of this type of spending.

Two sectors where less construction that initially thought took place are semiconductors and the automobile industry. A strengthening of domestic chipmaking started under President Joe Biden ran into problems like staff shortages, cost overruns and demand issues. Auto makers meanwhile are not investing as much in electric mobility under the current Trump administration, putting a damper on new construction in the field. Overall, the persistently high cost of raw materials like steel and copper – also subject to tariffs – coupled with ongoing shortages of electrical equipment and the like is also hurting construction projects.