U.S. Census Bureau, Associated Builders and Contractors
Non-residential construction spending rose slightly month-over-month.
Total construction spending fell 0.5% in July, according to data recently released by the U.S. Census Bureau. On a yearly basis, spending was down 3.8%.
The residential sector was largely responsible for the decline, down 1.3% since June and 7.3% since July 2025. Non-residential spending increased 0.1% when compared to the previous month, with a decline of 1.3% year-over-year. However, spending was largely concentrated in one area.
“The increase in nonresidential construction spending that occurred in July was entirely due to data centers,” Anirban Basu, chief economist at Associated Builders and Contractors, said in a statement. “Excluding that booming category, nonresidential spending fell for the second straight month and is down to the lowest level since September 2023.”
Office spending, including data center work, increased 16.9% since July 2025. Spending in the power sector, up 5.3% yearly, also benefited from data center construction due to increased electricity demand.
Of the remaining categories, lodging and manufacturing spending fell sharply, down 9.6% and 21.2%, respectively. Commercial spending declined 4.9%, while highway and street spending increased 4.5%.
“We are seeing tremendous volatility by subcategory,” says Michael Guckes, chief economist at ConstructConnect.
“It should be noted that manufacturing’s decline is in large part due to tough prior-year comparables, especially in the construction of computer and electronics manufacturing structures,” he adds. “These contractions are being only partially offset by strong gains in data centers and power.”
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Alisa Zevin is the economics editor for Engineering News-Record, covering economic issues within the construction industry, including construction economics and ENR’s quarterly cost reports. She is based in New York City.
