U.S. construction spending for all types of projects topped $2.1 trillion in January, declining about 0.2% from the prior month but rising 3.3% from a year earlier, according to the latest Commerce Department numbers. Some construction trade groups cautioned that spending on new projects could be negatively affected in coming months by newly enacted trade tariffs impacting building supplies coming from Mexico, Canada and China.

Based on seasonally adjusted annual figures, Monday’s government report showed year-over-year growth in spending was buoyed by a 3.2% increase in residential investment and a 3.4% rise in nonresidential spending.

On the residential side, January’s spending for new single-family projects rose 0.6% from the prior month but declined 0.9% from a year earlier. Multifamily spending declined 0.7% from the previous month and was down 12% from January 2024, a sign of a lingering slowdown in new development for that category.

Notable annual gainers on the nonresidential side included amusement and recreation projects at 13.5%, transportation at 7.1%, education facilities at 6.9% and manufacturing projects at 5.7%. Most nonresidential categories showed little change from the prior month.

“Construction spending growth has been slowing under pressure from high interest costs and now the prospect of new waves of tariffs,” said Ken Simonson, chief economist for the Associated General Contractors of America, in a Monday statement from the trade group. “There have already been notable cancellations and postponements for major manufacturing plants and the impacts of new tariffs are likely to lead to more delays and cancellations.”

The restaurant industry faces lingering financial challenges in the early weeks of 2025, signaled by recent events including about 500 job reductions at delivery firm Grubhub and the closing of 18 Del Taco locations in Colorado after a franchisee’s bankruptcy filing.

Chicago-based Grubhub said late last week it was eliminating more than 20% of its total workforce, with plans for a restructuring stemming from the $650 million acquisition of Grubhub by New York-based delivery rival Wonder, which closed in January.

The food delivery industry has become increasingly competitive and prone to consolidation, especially since the end of the pandemic. A company statement said Grubhub “must prioritize the right work and execute with speed and conviction by reducing management layers, bringing leaders closer to the business, and removing duplication.”

Del Taco’s owner, San Diego-based Jack in the Box, said in a statement that the closings of 18 of 19 franchised Del Taco locations in Colorado, stemming from a Chapter 11 filing by regional franchisee Newport Ventures LLC, were temporary as executives make arrangements with new operators to reopen them “as soon as possible.”

The company said the Del Taco in Grand Junction, Colorado, is owned and operated by a different franchisee and remains open for business. Several U.S. dining chains and regional franchisees cut staff and closed locations during the past year in response to financial struggles, though others have recently announced plans for expansion.

U.S. manufacturing, which can affect demand for industrial and retail real estate, grew for the second straight month in February after 26 months of contraction. Still, companies began to experience rising costs ahead of trade tariffs going into effect this week, according to the Institute for Supply Management.

The trade group’s monthly index report, based on surveys of corporate purchasing managers and gauging several metrics, found manufacturing growth registering at 50.3 for February, with numbers above 50 indicating expansion.

But new orders dropped into contraction territory and hiring slowed, indicating companies “are being cautious about ramping up output in the face of economic headwinds,” the trade group said in a statement Monday. Surveyed companies said prices for some manufacturing commodities have already gone up as much as 20% ahead of this week’s enactment of new tariffs on goods from Mexico, Canada and China.

“Demand eased, production stabilized, and destaffing continued as panelists’ companies experience the first operational shock of the new administration’s tariff policy,” Timothy Fiore, chair of the institute’s business survey committee, said in the statement.

The trade group said 10 tracked industries posted manufacturing growth in February, including petroleum and coal products, primary metals, wood products, food and beverages, transportation equipment and appliances. Five reported manufacturing contraction, including furniture, textiles, computers and electronics.