‘Only three categories prop up US construction spending’

It found that construction spending declined by 0.5% from June to July and by 3.8% compared to a year ago, totalling $2.158 trillion at a seasonally adjusted rate.

The AGC noted that it was demand for new data centres, power projects, and highways that were “propping up much of the industry” but that there are risks for all three.

Private non-residential construction increased 0.4% in July but fell 3.3% compared to July 2025.

Private “office” construction, which includes data centres in the government release, jumped 21.3% year-over-year. But the AGC noted that this increase was due entirely to data centre construction, which leapt 57.2% over the past 12 months. Other private office construction actually fell by 10.6%.

Manufacturing construction, which is the largest private non-residential segment fell for the sixth month in a row and, down 21.7% from a year earlier. The next-largest category, power (including oil- and gas-related projects) rose 6.5% over 12 months.

Private residential construction decreased 1.3% for the month and 7.3% compared to July 2025.

Public construction spending slipped 0.2% in July but was 1.7% higher than one year earlier. The largest public category, highway and street construction, declined 0.2% from June but was 4.5% higher than in July 2025.

“Only three categories are propping up construction spending: data centres, power and highway projects,” said Ken Simonson, the association’s chief economist. “Unfortunately, all of these segments face risks of cooling or shrinking due to worker shortages, political pushback, tariffs and a possible federal funding lapse for highway programs.”

Separately, Associated Builders and Contractors (ABC) found that there were 326,000 job openings in the US construction industry on the last day of July.

Industry openings increased by 28,000 in July and were up by 21,000 on the same time last year.

ABC chief economist Anirban Basu said, “The construction job opening rate rose to the highest level in nearly two years in July. Contractor hiring also accelerated for the month, while layoff activity slowed. This meaningful improvement in labour demand is a function of insatiable demand for data centres and the accompanying strength in power-related construction.

“With contractors broadly optimistic about expanding their staffing levels over the next six months, according to ABC’s Construction Confidence Index, it’s possible that reemerging worker shortages will put upward pressure on labour costs over the next several months.”