Construction spending continues to trend downward as market conditions remain tight.
Construction equipment investment dropped during the start of 2025 due to funding becoming tighter and spending declining, Chicago Federal Reserve economist Martin Lavelle said at Equipment Finance Connect 2025 last week in Nashville, Tenn.
“Even though orders are still holding up, the level of investment has come down,” he said. “All the COVID money has been dedicated toward a certain project or a certain test, and there’s no more of that, so what’s going on is what’s in the pipeline.”
The used heavy-duty construction equipment markets dipped in April, with overall inventory levels, asking values and auction values declining month over month, according to Sandhills Global’s May 6 report. Inventory for used heavy-duty equipment dropped 1.4% year over year and 0.8% from March, while asking values fell 3.3% YoY and 0.2% month over month, and auction values decreased 2.4% YoY and 0.6% MoM. 
‘Impossible’ commercial construction financing
Total construction spending in March declined 0.5% MoM, but increased 3% YoY, landing at $2.2 trillion, according to data from the U.S. Census Bureau. New multifamily construction especially continues to struggle, down less than 1% MoM and 12.1% YoY.
“One thing that’s actually come down a little more is commercial construction spending,” Lavelle said. “Retail construction has become limited to high location, prime location spots, residential is flat now, new home construction is hanging in there, but multifamily construction financing, some financiers talk about using the word ‘impossible.’ just because of the cost involved.”
With commercial construction activity limited, RB Global sold 87,600 commercial construction and transportation lots, down 19.5% YoY, according to the company’s May 7 earnings release. The company’s commercial construction and transportation gross transaction values totaled $1.3 billion, down 18.2% YoY.
Despite pressures on the finance and spending side, construction employment growth indicates there are some opportunities, Lavelle said.
“Even though we’ve had consistently strong construction employment growth … a lot of that is due to the legislation that was passed to help fund all different kinds of infrastructure projects,” he said. “Construction employment growth was already really strong, almost 4% in the five years pre-COVID, so projecting that out there is actually still room to grow.”
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