July Construction Spending Shows How Much Data Centers and Highways Are Carrying the Market

July construction spending showed a market that is still producing a huge amount of work, but the growth is narrowing. The U.S. Census Bureau estimated total construction spending at a seasonally adjusted annual rate of $2.1576 trillion in July 2026, down 0.5 percent from the revised June rate and down 3.8 percent from July 2025 U.S. Census Bureau.

For owners, developers, contractors, and subcontractors, the important point is not only that the headline number moved lower. The July report points to a market where private residential work, parts of private nonresidential construction, and some public categories are moving in different directions at the same time U.S. Census Bureau release PDF.

What happened in the July report

The Census Bureau released the July 2026 value-put-in-place report on September 1, 2026 under release number CB26-140 U.S. Census Bureau release PDF. The agency reported total spending of $2.1576 trillion at a seasonally adjusted annual rate, compared with a revised June estimate of $2.1677 trillion U.S. Census Bureau.

The year-to-date comparison also moved lower. During the first seven months of 2026, construction spending totaled $1.2446 trillion, which was 3.5 percent below the $1.2897 trillion recorded for the same period in 2025 U.S. Census Bureau.

Private construction was estimated at $1.6142 trillion in July, down 0.5 percent from June, while public construction was estimated at $543.4 billion, down 0.2 percent from the revised June estimate U.S. Census Bureau. Those month-to-month movements were modest, but the spread between categories matters because backlog, labor planning, and bid strategy depend on where owners are still moving projects forward.

Private work: residential softness and a narrower nonresidential base

Residential construction was estimated at $859.0 billion in July, down 1.3 percent from June U.S. Census Bureau. AGC’s analysis said private residential construction was down 7.3 percent from a year earlier, with single-family construction down 3.2 percent for the month and 6.5 percent year over year Associated General Contractors of America.

Private nonresidential construction moved the other way on a month-to-month basis. Census estimated private nonresidential spending at $755.2 billion in July, up 0.4 percent from June U.S. Census Bureau. AGC, however, noted that private nonresidential construction was still down 3.3 percent from July 2025, while manufacturing construction fell for the sixth month in a row and was down 21.7 percent year over year Associated General Contractors of America.

That combination is the practical issue for builders. A single monthly increase in private nonresidential spending does not automatically mean broad market strength if the gains are concentrated in a few categories and major owner groups are still delaying or repricing work.

Data centers are carrying more of the market

ABC’s September 1 analysis said national nonresidential construction spending increased 0.1 percent in July to a seasonally adjusted annualized rate of $1.286 trillion, but spending was down in 8 of 16 nonresidential subcategories Associated Builders and Contractors.

ABC Chief Economist Anirban Basu said the July increase in nonresidential spending was “entirely due to data centers,” and added that excluding that category, nonresidential spending fell for the second straight month and was at its lowest level since September 2023 Associated Builders and Contractors. AGC reached a similar conclusion, saying private “office” construction was up 21.3 percent year over year because data center construction rose 57.2 percent, while other private office construction fell 10.6 percent Associated General Contractors of America.

For contractors, this concentration creates both opportunity and risk. Firms positioned for data center, power, electrical, mechanical, civil, utility, and mission-critical work may see continuing bid activity, but companies tied to weaker private categories may not feel the same market even when the national headline looks stable.

Public work remains a stabilizer, but not a cure-all

Public construction spending was $543.4 billion in July, down 0.2 percent from June, while public educational construction was $112.3 billion and highway construction was $150.3 billion U.S. Census Bureau. AGC said total public construction was still 1.7 percent higher than a year earlier and highway and street construction was 4.5 percent higher than in July 2025 Associated General Contractors of America.

That public-side resilience matters for subcontractors and suppliers that can prequalify, bond, staff certified payroll requirements, and support longer procurement cycles. It also matters for private owners because public infrastructure demand can compete for the same labor, aggregates, equipment, traffic-control resources, trucking capacity, and specialty trades.

Why it matters for construction planning

The July data supports a disciplined bidding posture. Owners should not assume every contractor is equally busy, and contractors should not assume every segment is equally weak. Instead, teams should separate local market intelligence by category, procurement type, funding source, and trade availability.

For developers and facility owners, the construction-spending mix argues for earlier budget validation. If a project depends on long-lead electrical gear, structural steel, specialized mechanical systems, or civil infrastructure, the data center and power markets may still influence pricing and availability even when another building category is slowing.

For general contractors and subcontractors, the report reinforces the value of backlog quality over backlog volume. A backlog concentrated in funded infrastructure, utility, data center, or power work may carry a different risk profile than one dependent on discretionary private projects waiting for financing, rate relief, tenant commitments, or cost reductions.

What to watch next

• August construction spending: The next Census construction spending report is scheduled for October 1, 2026 U.S. Census Bureau release PDF.
• Data-center spillover: Watch whether the data center category continues to support office, power, utility, and sitework demand, or whether power constraints and public opposition slow project starts.
• Manufacturing construction: AGC reported that manufacturing construction fell for the sixth month in a row and was down 21.7 percent year over year, which makes it a key category to monitor for advanced manufacturing suppliers and industrial contractors Associated General Contractors of America.
• Public funding risk: Highway and public infrastructure activity remains important support for the market, but contractors should track federal and state funding timing closely before assuming that strength will continue unchanged.

Bottom line

July’s construction-spending report does not describe a collapsing market, but it does describe a more selective one. The headline total is lower, residential work is under pressure, manufacturing is weaker, and nonresidential growth is increasingly dependent on data centers and related power demand.

For construction decision-makers, the practical response is to estimate from current evidence, not last year’s assumptions. Owners should validate budgets early, contractors should pressure-test backlog by sector, and subcontractors should watch which categories are actually releasing work instead of relying on broad national spending headlines.

Image credit: Thumbnail image, “Construction cranes against a bright blue sky,” from Unsplash and used under the Unsplash License Unsplash.

Sources

• U.S. Census Bureau, Monthly Construction Spending, July 2026: https://www.census.gov/construction/c30/current/index.html
• U.S. Census Bureau, Monthly Construction Spending, July 2026 PDF release: https://www.census.gov/construction/c30/pdf/release.pdf
• Associated General Contractors of America, September 1, 2026 construction spending analysis: https://www.agc.org/news/2026/09/01/construction-spending-declines-july-june-and-year-earlier-contractors-cope-soft-demand-most-types
• Associated Builders and Contractors, July nonresidential construction spending analysis: https://www.abc.org/News-Media/News-Releases/abc-july-nonresidential-construction-spending-growth-entirely-due-to-data-centers
• Unsplash image source: https://unsplash.com/photos/construction-cranes-against-a-bright-blue-sky-ekyidP1g9Jo