Nonresidential Construction Spending Falls in August
Key Highlights
- Construction spending decreased for the third time in four months, signaling ongoing industry challenges
- Data centers are a rare bright spot, with contractors holding higher backlogs and ongoing demand
- High borrowing costs and rising materials prices are contributing to the slowdown in private nonresidential activity
WASHINGTON, DC — National nonresidential construction spending decreased 0.2% in August, according to an Associated Builders and Contractors analysis of data published today by the US Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.24 trillion.
Spending was down on a monthly basis in 10 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.3%, while public nonresidential construction spending was down 0.1% in August.
Pre-Shutdown Numbers
“Nonresidential construction spending contracted for the third time in the past four months in August and is now down 1.5% year over year,” said ABC Chief Economist Anirban Basu. “The manufacturing and commercial categories have been particularly weak in 2025, while momentum remains confined almost exclusively to the data center segment. This should come as no surprise given that approximately 1 in 7 ABC members are under contract to work on a data center, and those contractors have significantly higher backlog than those that are not, according to ABC’s Construction Backlog Indicator survey.
“Of course, this data pertains to August and reflects neither the effects of the government shutdown nor the cost-raising potential of tariffs that were implemented at the start of that month,” said Basu. “With private nonresidential activity buckling under the weight of high borrowing costs, extraordinarily elevated uncertainty and rising materials costs, a slowdown in public sector work could lead to a particularly difficult few quarters for the industry.”
Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.