Dive Brief:
- Private nonresidential construction spending increased 1.1% month over month in September, according to a U.S. Census Bureau report released Monday.
- Spending on data center construction, the industry’s brightest spot for months, jumped 8.6% month over month in September, according to Associated Builders and Contractors analysis of the data.
- The artificial intelligence buildout will continue to account for much of the growth in nonresidential construction spending, said Anirban Basu, ABC chief economist.
Dive Insight:
Spending on nonresidential construction posted its sixth consecutive monthly increase in September, largely due to data centers and power projects, said Basu.
Without those two sectors, nonresidential construction spending would be weaker, according to the ABC analysis. He added spending in the category since May has grown at a 217% annualized rate.
“As has been the case for several months, data centers accounted for virtually all of that increase,” said Basu. “Excluding data centers and the closely related power category, nonresidential spending actually fell in September.”
Over the past year, spending on data center construction soared 90%, according to a report from the Associated General Contractors of America. Private electric power investment, on the other hand, is also up 14% from September 2025.
All other private nonresidential categories combined declined 7.8% over the same period, according to AGC.
“Surging demand for data centers and power projects is masking cutbacks in other investments while adding to the strains on construction supply chains and cost caused by high tariffs and international conflicts,” said Ken Simonson, AGC chief economist.
Basu expects the spending increases on data center and power construction to continue in the near-term. Due to the recent rise in treasury yields and ongoing materials price escalation, momentum should remain for artificial intelligence-related projects over the next several months, he said.
