Data Centers Drive Sixth Straight Month of Growth in US Nonresidential Construction

According to an Associated Builders and Contractors (ABC) analysis of US Census Bureau data, national nonresidential construction spending increased 0.6% in September to a seasonally adjusted annual rate of $1.325 trillion, marking the sixth consecutive monthly increase.

Spending rose in eight of the 16 nonresidential subcategories. Private nonresidential construction spending increased 1.1%, while public nonresidential spending declined 0.1%.

Commenting on the report, ABC Chief Economist Anirban Basu said:

“Nonresidential construction spending grew for the sixth consecutive month in September. As has been the case for several months, data centers accounted for virtually all of that increase. Excluding data centers and the closely related power category, nonresidential spending actually fell in September. It’s increasingly difficult to contextualize the speed of the data center boom; spending in the category jumped another 8.6% in September and has grown at a 217% annualized rate since May.

Given the recent rise in treasury yields and ongoing materials price escalation, momentum will remain narrowly concentrated in artificial intelligence-related segments over the next several months. While contractors remain busy in the aggregate, according to ABC’s Construction Backlog Indicator, current market dynamics will continue to favor larger contractors who are far more likely to be involved in data center and power projects.”