The Daily Dig
Nonresidential construction spending edged up 0.1% in April, reaching a seasonally adjusted annualized rate of $1.250 trillion. According to ABC Chief Economist Anirban Basu, that growth was entirely due to a sizable increase in public sector activity, which rose 0.4% on the month. Private nonresidential spending declined 0.2%, extending its losing streak to seven consecutive months.
That sustained contraction has pushed private spending down nearly 8% from the all-time high set in December 2023. Basu attributes much of that weakness to the rapid decline of CHIPS Act-incentivized manufacturing megaprojects. Outside of that segment, private construction momentum has been broadly difficult to find.
The exception is data centers. Tracked within the office subcategory, data center spending climbed 1.9% in April to a seasonally adjusted annual rate of $50.7 billion and is up 28.1% over the past year. Basu noted that data center activity has been buoying the ABC Construction Backlog Indicator and keeping ABC member confidence relatively stable overall. Ten of the 16 nonresidential subcategories posted monthly spending gains.
Looking ahead, Basu flagged rising materials prices and a lack of momentum across many commercial segments as factors that could eventually weigh on contractor sentiment, even as the data center tailwind is expected to persist for some time.
Snapshot:
Report Source: Associated Builders and Contractors (ABC) / U.S. Census Bureau
Data Period: April 2026
Total Nonresidential Spending (SAAR): $1.250 trillion
Monthly Change (Total): +0.1%
Public Nonresidential Spending Change: +0.4%
Private Nonresidential Spending Change: -0.2%
Private Spending Monthly Decline Streak: 7 consecutive months
Private Spending vs. December 2023 Peak: Down ~8%
Data Center Spending (SAAR): $50.7 billion
Data Center Monthly Change: +1.9%
Data Center Year-Over-Year Change: +28.1%
Subcategories Posting Monthly Gains: 10 of 16
Key Demand Driver: Data centers (tracked within office subcategory)
Key Headwinds: CHIPS Act manufacturing megaproject decline, rising materials prices, weak commercial segments
TheJobWalk Thoughts
Seven consecutive months of private spending declines is not noise. The CHIPS Act manufacturing surge drove significant volume across GC and subcontractor pipelines, and Basu is direct that its rapid decline is behind much of the current private-side weakness. Beyond data centers, private sector construction momentum has been difficult to find, and commercial segments are not showing signs of stepping in to change that picture.
The public sector increase is real, but a 0.4% monthly gain in public spending is not a volume story. It is a stabilizer, not a replacement for the private work that has been leaving the market for seven straight months. GCs and subs who shifted toward public work as private volume softened should be clear-eyed about what that market can actually absorb.
Rising materials prices landing on top of soft commercial demand creates a narrowing gap between what contractors need to price work at and what the market will bear. Basu flagged both as potential headwinds for sentiment, and historically that combination pressures margins and bidding behavior well before it registers in the spending data.
Courtesy of ABC
Courtesy of ABC
