An analysis of government data shows that construction across the nation declined slightly in July, reinforcing some experts’ assertions that tariffs and labor shortages are hampering the industry. 

Overall, construction spending fell 0.1% from June to July to $2.14 trillion, according to the Associated General Contractors of America. However, some project types fared much worse, with commercial construction declining 0.9%, manufacturing and private power construction falling 0.7% and multifamily projects down 0.4%. 

“Our survey of construction firms found 16% of contractors reported projects had been canceled, postponed or scaled back as owners’ demand or need changed due to tariffs while 45% of firms report project delays because of labor shortages,” said Ken Simonson, AGC’s chief economist, in a statement. “And 26% of firms said projects had been affected by changes in owners’ demand or need due to other policy changes such as federal funding, taxes and regulations.” 

There were some bright spots; public construction outlays and single-family homebuilding increased 0.3% and 0.1%, respectively. But industry experts said that prior reports showing that the volatility in the market due to tariff costs along with labor challenges due to an immigration crackdown demonstrate the need for policy certainty at the federal level.