ABC – Data Center Construction Spending Growing at 149% Annualized Pace Since March
National nonresidential construction spending increased 0.7% in August, according to an Associated Builders and Contractors analysis of data published October 1 by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.309 trillion.
Spending was up on a monthly basis in 11 of the 16 nonresidential subcategories. Private nonresidential spending was up 1.0%, while public nonresidential construction spending was up 0.2% in August.
“Nonresidential construction spending increased for the fifth consecutive month in August as data center investment accelerates,” said ABC Chief Economist Anirban Basu. “Frankly, it’s becoming difficult to contextualize the size and speed of this boom. Data center construction spending leapt another 7.5% in August and is now up more than 73% over the past 12 months. The increases have been particularly large over the past four months, with data center spending increasing at an incredible 149% annualized pace since March.
“While momentum remains particularly concentrated in the data center segment, several other segments posted surprisingly strong spending growth in August,” said Basu. “Manufacturing construction activity, for instance, expanded on a monthly basis for the first time since January, while several public categories grew at a steady, albeit unspectacular, pace.
“Despite this broad improvement, momentum will likely remain confined to the data center and power categories in the months to come,” said Basu. “Materials and labor cost escalation have reemerged during the second half of 2026, and the recent surge in Treasury yields will continue to put upward pressure on borrowing costs. ABC members remain optimistic about the sales outlook, according to ABC’s Construction Confidence Index, yet those sales will increasingly be in a narrow subset of construction categories.”
ABC: Construction Materials Prices Jump 2.2% in September, Up 11.2% Year Over Year
| Construction input prices increased 2.2% in September compared to the previous month, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices increased 2.3% for the month.
Both overall and nonresidential construction input prices rose 11.2% between September 2025 and September 2026. Crude petroleum and unprocessed energy materials prices increased 28.3% and 22.2%, respectively, while natural gas prices increased 5.1% for the month “Construction input prices have risen more than 11% over the past 12 months, the largest year-over-year increase in nearly four years,” said ABC Chief Economist Anirban Basu. “While higher fuel prices brought about by the conflict in Iran have driven a substantial portion of the increase, prices for tariffed materials like iron, copper and other metal products continue to rise rapidly. “In light of this precipitous and ongoing increase in materials prices, it is unsurprising that more than 1 in 4 ABC contractors expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index.”
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ABC Report: Proactive Safety Technology Protects Workers, Jobsites
Associated Builders and Contractors in early October released its sixth annual construction technology report on health and safety tech and innovation, 
which spotlights how contractors are leveraging technology, data and collaboration to address the industry’s health and safety challenges while creating measurable improvements in workforce performance and operational excellence. ABC released the report during Careers in Construction Month to celebrate construction safety professionals’ commitment to protecting workers.
ABC’s Tech and Innovation Report: Health and Safety features case studies authored by safety and risk management leaders at ABC member contractors finding better ways to keep workers hydrated in the heat, detect patterns in incident data to eliminate injuries and establish safety standards for hand tools. Health and safety experts also described the deployment of Relationship Dynamics Ambassadors to connect employees with coaching and resources, better jobsite security monitoring, faster and safer inspections with drones and digitizing pre-task planning and hazard recognition.
Visit abc.org/techreport to read the digital report.
FMI
Where construction is still growing in 2026FMI’s fourth-quarter 2026 North American Engineering and Construction Outlook is out. We now forecast U.S. construction spending at $2.167 trillion this year, down 3.4% from 2025. Last quarter, we projected a 1.3% decline. Data centers and power are still growing. Ten of 19 segments are declining, including all three residential segments. |
Key Trends
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| This report includes forecasts for all 19 segments through 2030, contractor sentiment scores, metro growth projections and Canada’s outlook. Download the Q4 Outlook |
AWCI Releases 2026 Wall and Ceiling Industry Trends Report
Backed by the Foundation of the Wall and Ceiling Industry, the AWCI-FMI 2026 Industry Trends Report delivers vital market insights for wall and ceiling professionals. The report evaluates member sentiment on the economy, construction sector and business performance, while highlighting key priorities and concerns for contractors, manufacturers and suppliers.
With continued funding and support from the Foundation of the Wall and Ceiling Industry, the Association of the Wall and Ceiling Industry (AWCI) once again partnered with FMI to conduct a comprehensive survey and analysis of industry trends. The 2026 findings provide critical market insights enabling companies in the wall and ceiling industry to think strategically about the market and their businesses.
The 2026 survey measured AWCI member companies’ sentiment on the performance of the economy, the construction industry and their businesses, while also exploring strategic priorities, business operations and top concerns among contractors, manufacturers and suppliers.
Key findings include:
- Economic Outlook and Growth Segments: Member sentiment has shifted toward stability, with 47% to 51% of respondents expecting conditions to remain unchanged across evaluated areas, while data centers and health care are expected to see the strongest growth and project demand in 2027.
- Labor and Business Concerns: Talent availability remains the leading concern for contractors, alongside workforce development and cost escalation, with field management and skilled trades cited by over 90% of respondents as pressing staffing needs.
- Demand and Strategy: Product demand has generally improved over the past 18 months, and contractor backlog conditions remain healthy with 77% reporting at least seven months of contracted work. Contractors are prioritizing increasing volume with existing customers and gaining market share, whereas manufacturers focus on new products and suppliers focus on geographic and segment expansion.
