Construction spending ticked down 0.1% in April from March — so basically flat — the Census Bureau reported Monday. And construction spending has barely budged going back to the start of this year. That’s after a healthy 14% run-up in spending last year.

This year’s flatline in construction spending was kind of inevitable, said Anirban Basu, CEO of Sage Policy Group.

“I think it’s interest rates finally starting to catch up with this industry,” he said.

The Federal Reserve started raising interest rates back in 2022 to stem inflation. Basu said at first the higher borrowing costs didn’t really affect builders “because people have signed contracts, they’ve made decisions to move forward, and it takes a while for those higher interest rates to interrupt the economy,” he said.

But Basu said that interruption may have arrived. Spending on the construction of commercial buildings was down in April, along with multifamily housing.

“What we’re seeing right now is the end of an apartment building boom,” said Robert Dietz, chief economist at the National Association of Home Builders.

He said last winter 1 million apartments were under construction, the highest unit count since May of 1973.

Now though, that number’s down by more than a third, he said, in part because developers are having a harder time financing new buildings. But not all construction is so sensitive to borrowing costs.   

“If you’ve flown in any airport lately, you’ve seen a lot of construction,” said Kathryn Thompson, CEO of Thompson Research Group.

She said transportation infrastructure — from air, to rail, to roads — has taken off, thanks in part to recent federal legislation. Also being built: water systems and industrial construction like factories.

“They were, candidly, pretty boring categories up until now,” Thompson said.

She expects factories will continue being built, even if overall construction remains flat for a while.