A surge in data center projects steadied activity to kick off summer, but material costs and policy swings caused developers to pull back on many jobsites, according to the latest economic reports.

Backlog ticked up on the strength of data center contracts, while early-stage planning activity climbed again in June. Total construction starts also jumped 16%, fueled by a wave of manufacturing and data center groundbreakings.

But not all sectors kept pace. Nonresidential construction spending fell for the sixth time in seven months, largely due to weak private investment and labor concerns. Overall commercial activity also lagged outside of major projects.

At the same time, the impact of President Donald Trump’s tariffs continues to sharpen concerns about future activity. Prices climbed for key inputs including structural steel components and lumber, to name a few. Contractors absorbed the increases in June but warned steeper hikes could lead to more project delays.

Nevertheless, many firms are holding onto a cautiously optimistic outlook. Three in five contractors expect revenue growth through year-end, and data center builders report no slowdown in early-stage demand.

Yet even with that optimism, contractors face a tricky path forward. Firms continue to report delays tied to costs, especially on projects sensitive to labor and trade dynamics. Though federal incentives may offer some relief, many developers remain hesitant to greenlight new work.

Here, Construction Dive rounds up the latest key economic data for builders.