Key Takeaways
- National nonresidential construction spending increased 0.1% in July.
- On a seasonally adjusted annualized basis, nonresidential spending totaled $1.286 trillion for the month.
- "...The increase in nonresidential construction spending that occurred in July was entirely due to data centers. Excluding that booming category, nonresidential spending fell for the second straight month and is down to the lowest level since September 2023."
Press Release from Associated Builders and Contractors (ABC)
ABC: July Nonresidential Construction Spending Growth Entirely Due to Data Centers
WASHINGTON, Sept. 1—National nonresidential construction spending increased 0.1% in July, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.286 trillion.
Spending was down on a monthly basis in 8 of the 16 nonresidential subcategories. Private nonresidential construction spending was up 0.4%, while public nonresidential spending was down 0.2% in July.
“The increase in nonresidential construction spending that occurred in July was entirely due to data centers,” said ABC Chief Economist Anirban Basu. “Excluding that booming category, nonresidential spending fell for the second straight month and is down to the lowest level since September 2023.
“Nonresidential activity is even more concentrated given that the power category, which has been boosted by the electricity needs of data centers, has also grown substantially over the past year,” said Basu. “While contractors remain upbeat about their sales over the next six months, according to ABC’s Construction Confidence Index, that upbeat outlook is increasingly dependent on a single sector.”
Press Release from Associated General Contractors of America (AGC)
Latest Data Show Growth is Concentrated in Data Center, Power and Highway Construction; Association Prepares to Release Survey Pointing to Challenges to Maintaining Growth in Industry Workforce
Construction spending declined by 0.5% from June to July and by 3.8% compared to a year ago, according to an analysis by the Associated General Contractors of America of a new government report released today. Association officials noted that demand for new data centers, power projects and highways is propping up much of the industry, but all three segments are at risk.
“Only three categories are propping up construction spending: data centers, power and highway projects," said Ken Simonson, the association’s chief economist. Unfortunately, all of these segments face risks of cooling or shrinking due to worker shortages, political pushback, tariffs and a possible federal funding lapse for highway programs.”
Construction spending totaled $2.158 trillion at a seasonally adjusted annual rate in July. That figure is 0.5% below the revised June rate and 3.8% below the July 2025 level.
Private nonresidential construction increased 0.4% in July but fell 3.3% compared to July 2025. The largest segment, manufacturing construction, fell for the sixth month in a row and plunged 21.7% from a year earlier. The next-largest category, power (including oil- and gas-related projects) rose 6.5% over 12 months. Private “office” construction, which includes data centers in the government release, jumped 21.3% year-over-year. But this apparent increase was due entirely to data center construction, which soared 57.2% over the past 12 months, while other private office construction tumbled 10.6%.
Private residential construction decreased 1.3% for the month and 7.3% compared to July 2025. Single-family construction slumped 3.2% from June and 6.5% year-over-year. Multifamily construction edged up 0.2% for the month but remained 0.9% lower than one year earlier.
Public construction spending slipped 0.2% in July but was 1.7% higher than one year earlier. The largest public category, highway and street construction, declined 0.2% from June but was 4.5% higher than in July 2025. Public educational spending dipped 0.2% in July but increased 0.4% year-over-year. Public outlays for transportation facilities such as airports declined 0.8% for the month but rose 2.3% from a year earlier. Spending on sewage and waste disposal structures rose 0.4% from June but slipped 1.1% year-over-year.
Association officials noted that they will be releasing the results of an annual workforce survey, in partnership with NCCER, on Thursday, Sept. 3 during a virtual media briefing at 1 p.m. EDT. Those survey results will show just how much demand for data centers and related projects is supporting the broader construction industry.
“The new survey results will show how demand for just a few project types has made the difference for the construction industry this year,” said Jeffrey D. Shoaf, the association’s chief executive officer. “But politics and policies threaten the three strongest market segments at this point, putting construction activity and employment levels at risk.”
