Data Centers | Construction Metrics

Construction spending rose 0.9% in August after Census revised July up $27 billion

Thu, 01 Oct 2026 11:38:57 -0400

US construction spending ran at a seasonally adjusted annual rate (SAAR) of $2,203.1 billion in August 2026, according to the preliminary estimate the Census Bureau released on October 1. SAAR means the month’s spending, adjusted for normal seasonal swings and scaled up to a full year. August is 0.9% above a revised July figure of $2,184.5 billion and 1.7% below August 2025. Census also raised July by $26.9 billion from the $2,157.6 billion it first published on September 1, which turns July’s reported 0.5% drop into a 0.1% dip. August lands about $1.5 billion above the 12-month average of $2,201.7 billion and ranks 18th of the last 25 months, the highest level since December 2025.

August spending returned to its 12-month average

Total construction spending, billions of dollars, seasonally adjusted annual rate

August 2026 is preliminary. June and July 2026 are revised. Source: fred.stlouisfed.org

Total construction spending, last 13 months
Month	Spending ($B SAAR)	MoM	YoY
Aug 2025	$2,242.0	0.0%	-0.2%
Sep 2025	$2,245.8	0.2%	-0.8%
Oct 2025	$2,241.1	-0.2%	-1.0%
Nov 2025	$2,220.7	-0.9%	-1.9%
Dec 2025	$2,216.0	-0.2%	-1.9%
Jan 2026	$2,195.6	-0.9%	-2.9%
Feb 2026	$2,189.7	-0.3%	-3.4%
Mar 2026	$2,199.4	0.4%	-2.5%
Apr 2026	$2,168.2	-1.4%	-4.2%
May 2026	$2,168.4	0.0%	-3.4%
Jun 2026	$2,187.4	0.9%	-2.2%
Jul 2026	$2,184.5	-0.1%	-2.6%
Aug 2026	$2,203.1	0.8%	-1.7%

Source: census.gov

What moved

Private construction accounted for $17.6 billion of the $18.7 billion increase. It rose 1.1% to $1,655.3 billion, while public spending rose 0.2% to $547.8 billion. Census reports the 1.0% gain in private nonresidential spending, to $773.0 billion, as statistically significant. The 1.1% gain in private residential, to $882.3 billion, and the 0.9% gain in the total are not, because their 90% confidence intervals include zero.

Within private nonresidential, office spending rose 4.6% to $134.1 billion and is 29.8% above August 2025. Census counts data centers as a subcategory of office, so this line includes the data center work covered in yesterday’s post on the a16z report. (Table 1 of the release does not show the data center subcategory on its own.) Private power rose 0.9% to $165.9 billion and is up 9.7% from a year earlier.

Private manufacturing was flat at $168.2 billion in August. A year ago it ran at $209.8 billion, so the category is down 19.8%, the largest year-over-year decline among the private nonresidential categories in Table 1. Commercial and lodging each fell 0.1% in August and are 5.4% and 10.1% below a year earlier.

On the residential side, new single-family rose 0.2% to $403.3 billion and new multifamily rose 0.2% to $115.8 billion. Census notes that private residential also includes improvements to existing homes. Subtracting the two new-construction lines from the residential total leaves about $363.2 billion in August against $354.5 billion in July, so improvements account for most of the residential gain. (That subtraction is our arithmetic on Table 1.)

Public highway and street spending was $150.6 billion and public educational was $113.1 billion, each up 0.1%. Public conservation and development is 28.4% above August 2025, at $16.5 billion.

How to use this number

Sort last year’s bid log by building type and set it next to the matching lines in Table 1. A contractor whose pipeline leans on manufacturing plants is bidding into a segment that spent 19.8% less than a year ago, and one doing office and data center work is bidding into a segment that spent 29.8% more. If the dollar value of your manufacturing bids fell by less than 19.8% over the same year, your bidding in that segment held up better than its spending did.
Compare your own revenue with a three-month average of the total, which smooths out single-month noise. June through August 2026 averaged $2,191.7 billion, 2.2% below the same three months of 2025. If your billed revenue for those months is flat to last year, you held up better than the national total in nominal dollars. Census adjusts these figures for seasonality but not for price changes, so any rise in material and labor costs over the year means physical volume fell by more than 2.2%.

Revisions and caveats

August is preliminary. Census will revise it when it publishes September data on November 2, 2026. This month’s revision to July was large:

On September 1, Census put July at $2,157.6 billion, 0.5% below a June figure of $2,167.7 billion.
On October 1, it revised July to $2,184.5 billion and June to $2,187.4 billion.
July now shows a 0.1% decline from June, and the $26.9 billion upward revision to July is larger than August’s $18.7 billion gain.

Census says the average absolute change from the preliminary estimate to the first revision is 0.65% for total construction. July moved 1.2%, close to twice that. Most of the change came from private construction, where July residential went to $872.7 billion from $859.0 billion and nonresidential to $765.0 billion from $755.2 billion.

So the August estimate is uncertain as well. Its 0.9% increase carries a 90% confidence interval of plus or minus 1.0 percentage point, and Census says the evidence is insufficient to conclude the change differs from zero. The release also says it can take two months to establish an underlying trend for total construction and as long as eight months for specific categories. The estimates come from several sources and surveys and carry both sampling and nonsampling error.

Through the first eight months of 2026, construction spending totaled $1,450.4 billion, 3.1% below the $1,496.6 billion for the same period of 2025.

a16z says AI accounts for nearly all new construction spending, and Census shows data centers up 57.2% as the total fell 3.8%

Wed, 30 Sep 2026 18:22:11 -0400

Andreessen Horowitz’s growth fund, a16z Growth, published its State of Markets deck in September 2026. Most of its 90 pages cover stock prices, chips and software. One line in the opening section is about construction: the firm writes that the AI infrastructure build-out alone accounts for “all or nearly all of net-new construction spending.” Census figures for July 2026, the latest month released, let a contractor test that line. Private data center construction ran at a seasonally adjusted annual rate (SAAR) of $75.2 billion, up 57.2% from July 2025, while total construction spending fell 3.8% to $2,157.6 billion SAAR. Both July figures are preliminary.

What the report says

The deck is written for investors, so its construction material arrives as evidence for a market argument. These points come from a16z and the sources it cites:

Capital spending by the largest cloud operators, which a16z calls hyperscalers and lists as Alphabet, Amazon, Meta, Microsoft and Oracle, was $241 billion in 2024 and $416 billion in 2025, according to J.P. Morgan Asset Management figures in the deck. Analysts’ consensus estimates put 2026 at $791 billion and 2027 at $1,066 billion. a16z writes that each year’s consensus forecast has come in below what the companies then spent.
That spending has cut the companies’ free cash flow sharply (free cash flow is the cash left after operating costs and capital spending). a16z expects the drop to last until about 2028, and it shows bond sales and off-balance-sheet vehicles covering part of the difference.
Goldman Sachs, cited in the deck, estimates that construction employment in data center-exposed categories rose by more than 300,000. The categories are HVAC contractors, electrical contractors, utility construction and commercial building construction.
Indeed figures in the deck compare posted pay for the same job title on data center postings and on other postings.
A slide on supply bottlenecks lists megawatt switchgear at 52 to 104 weeks, in a power and grid group that also names transformers and gas turbines.

Hyperscaler capital spending, billions of dollars
Year	Capex	Basis
2019	71	Actual
2020	97	Actual
2021	131	Actual
2022	159	Actual
2023	154	Actual
2024	241	Actual
2025	416	Actual
2026	791	Estimate
2027	1,066	Estimate
2028	1,179	Estimate

Source: d1lamhf6l6yk6d.cloudfront.net

What Census and BLS show

Census splits private office construction into general office, financial and data centers, and the data center line is where the growth is. It more than doubled in two years, from $36.1 billion SAAR in July 2024 to $75.2 billion in July 2026. It rose 6.2% from June alone.

Data center construction reached $75.2 billion SAAR in July 2026 and has led chip and electronics plants since April

Private construction spending, millions of dollars, seasonally adjusted annual rate

July 2026 is preliminary. Census counts data centers within private office construction. Source: census.gov

In dollars, data centers added $27.4 billion from July 2025 to July 2026. Every other category combined lost $112.4 billion, which is how the national total fell $85.1 billion. So the a16z line holds for the categories that grew. Data centers posted the largest dollar gain of any detailed category Census reports, ahead of private electric power at $10.2 billion and highway and street at $6.5 billion.

From July 2025 to July 2026, millions of dollars, SAAR
Step	Millions of dollars, SAAR	Billions of dollars, SAAR
Total, July 2025	2242633	2242.6
Data centers	27356	27.4
Private electric power	10189	10.2
Highway and street	6488	6.5
Private manufacturing	-46548	-46.5
Private residential	-68089	-68.1
Everything else	-14448	-14.4
Total, July 2026	2157581	2157.6

Source: census.gov

The deck’s other construction theme, a return to building physical things, reads differently in the same tables. Private spending on computer, electronic and electrical plants, the category that holds chip fabs, fell 46.9% in a year to $51.3 billion SAAR, 59.4% below its peak of $126.4 billion in June 2024. Data centers passed it in April 2026, and they led it by $23.9 billion in July.

BLS payroll counts back the labor half of the claim. They run a month behind for detailed industries. The four industries Goldman names employed 3,920,200 people in July 2026, a preliminary figure, which is 109,400 more than a year earlier. Total construction employment rose 76,000 over the same months, so the rest of the industry lost 33,400 jobs. From January 2023, the four industries added 337,100 jobs, consistent with Goldman’s figure. The starting month of Goldman’s count is not shown in the deck. (These four industries also build hospitals, warehouses and plants, so the BLS counts include work beyond data centers.)

Employment, thousands, seasonally adjusted
Industry	January 2023	July 2025	July 2026	Change, July to July
Electrical contractors	1046.4	1115.1	1157.1	42.0
Plumbing and HVAC contractors	1243.3	1315.0	1338.2	23.2
Commercial and institutional building	719.6	761.0	785.4	24.4
Utility system construction	573.8	619.7	639.5	19.8
Four trades combined	3583.1	3810.8	3920.2	109.4
All other construction	4348.9	4450.2	4416.8	-33.4
Total construction	7932	8261	8337	76

Source: api.bls.gov

Pay and lead times

Indeed’s figures in the deck compare median posted base pay for the same job title on data center postings and on other US postings from January to June 2026. Superintendent postings for data center work showed $139,000 against $110,000 elsewhere, a difference of 26.4%. Construction manager postings showed $134,000 against $104,000. Project managers had a smaller gap, $115,000 against $103,000.

Median posted base pay, thousands of dollars, January to June 2026
Job title	Other postings	Data center postings	Difference	Difference (%)
Facilities manager	82	134	52	63.4%
Construction manager	104	134	30	28.8%
Superintendent	110	139	29	26.4%
Project manager	103	115	12	11.7%
Electrical engineer	114	125	11	9.6%

Source: d1lamhf6l6yk6d.cloudfront.net

Indeed’s own July analysis shows how concentrated the hiring is. Data center postings have more than doubled in two years to about 6 of every 1,000 US job postings, and the 10 largest tech firms account for 71% of them in 2026. The postings cluster in a few places, including the outskirts of Columbus, Ohio; Jackson, Mississippi; Reno, Nevada; and Hermiston, Oregon.

On equipment, a 52 to 104 week lead time means switchgear ordered in October 2026 would arrive between October 2027 and October 2028.

How to use this on your jobs

Anyway, the part of the deck a contractor can act on is the concentration it describes. The growth in construction spending and in trade jobs comes from a small group of owners, and a16z shows those owners borrowing to build while their free cash flow drops. These steps use records most firms already keep:

Tag each job in the backlog report by end market (data center, power, other private, public) and by owner. Then compute the data center share of backlog: contract value remaining on data center and power jobs divided by total contract value remaining. Capture it for the last four quarter-ends as a baseline.
On data center subcontracts, read the pay-when-paid clause, retainage terms and lien notice deadlines with the owners’ cash position in mind.
Track superintendent and project manager turnover by metro, and log the reasons candidates give for declining offers. Compare them with the pay gap Indeed reports, and price retention into bids in the metros Indeed names.
Release long-lead electrical gear at award, and write escalation language for it into the subcontract.

The deck also cites Apollo figures that apply to any AI pilot a contractor runs. In the second quarter of 2026, 69% of S&P 500 companies pointed to a live AI deployment and 2% disclosed a metric they track over time. Before a pilot starts, pick its metric, such as RFI turnaround in calendar days, and record the baseline on one job.

Share of S&P 500 companies, percent
Stage	Q1 2026	Q2 2026
Stated AI plan or goal	68	74
Live deployment with usage or adoption figures	64	69
Quantified result	26	29
Tracked metric over time	1	2

Source: d1lamhf6l6yk6d.cloudfront.net

Revisions and caveats

Census’s July figures are preliminary. Its average revision from the preliminary estimate to the first revision is 0.65% for total construction, and August figures come out October 1, 2026. The BLS counts for July in the four detailed industries are marked preliminary as well.

The a16z capex figures for 2026 and later are consensus estimates, and a16z says in its disclosures that it has not independently verified the third-party data in the deck. Indeed’s pay figures are median posted base pay on postings that disclose pay, so they measure advertised offers. Indeed counts a posting as data center-related when the term appears anywhere in its title or description, and Indeed notes that this picks up some roles unrelated to data centers.