Nonresidential construction spending rose for a sixth straight month in September, with data centers driving virtually all of the gain, ABC said.
Nonresidential construction spending increased 0.6% in September, according to an Associated Builders and Contractors (ABC) analysis of data the U.S. Census Bureau published November 2. On a seasonally adjusted annualized basis, spending totaled $1.325 trillion.
Spending rose from August in 8 of the 16 nonresidential subcategories. Private nonresidential spending climbed 1.1%, while public nonresidential spending dipped 0.1%.
“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.”
Data center spending jumped another 8.6% in September and has grown at a 217% annualized rate since May.
Basu expects momentum to stay narrowly concentrated in segments tied to artificial intelligence over the next several months, given the recent rise in treasury yields and ongoing materials price escalation.
“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,” he said.