Data Centers Continue to Drive Nonresidential Spending Higher in September

National nonresidential construction spending increased 0.6% in September, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.325 trillion.

Spending was up on a monthly basis in 8 of the 16 nonresidential subcategories. Private nonresidential spending was up 1.1%, while public nonresidential construction spending was down 0.1% in September.

“Nonresidential construction spending grew for the sixth consecutive month in September,” said ABC Chief Economist Anirban Basu. “As has been the case for several months, data centers accounted for virtually all of that increase. Excluding data centers and the closely related power category, nonresidential spending actually fell in September. It’s increasingly difficult to contextualize the speed of the data center boom; spending in the category jumped another 8.6% in September and has grown at a 217% annualized rate since May.

“Given the recent rise in treasury yields and ongoing materials price escalation, momentum will remain narrowly concentrated in artificial intelligence-related segments over the next several months,” said Basu. “While contractors remain busy in the aggregate, according to ABC’s Construction Backlog Indicator, current market dynamics will continue to favor larger contractors who are far more likely to be involved in data center and power projects.”