Data center construction spending accelerated in August and continues to support nonresidential construction hiring, according to analyses of U.S. Census Bureau and U.S. Bureau of Labor Statistics data done by the Associated Builders & Contractors (ABC).
Data center construction spending increased 7.5 percent in August and was up more than 73 percent over the previous 12 months, according to Anirban Basu, ABC’s chief economist.
Since March, data center spending has increased at a 149 percent annualized pace.
“Nonresidential construction spending increased for the fifth consecutive month in August as data center investment accelerates,” Basu says. “Frankly, it’s becoming difficult to contextualize the size and speed of this boom.”
National nonresidential construction spending increased 0.7 percent in August, reaching a seasonally adjusted annual rate of $1.31 trillion. Private nonresidential spending rose 1 percent during the month, while public nonresidential construction spending increased 0.2 percent.
Basu says construction spending momentum is likely to remain centered on data center and power projects in the coming months. He cites materials and labor cost escalation in the second half of 2026, along with higher Treasury yields expected to put upward pressure on borrowing costs.
“ABC members remain optimistic about the sales outlook, according to ABC’s Construction Confidence Index, yet those sales will increasingly be in a narrow subset of construction categories,” Basu says.
Hiring remains hot
Continued growth in data center demand has contributed to increased construction employment.
In September, the industry added 11,000 jobs, the seventh consecutive month of net job growth. Year over year, construction employment was up 109,000 jobs (1.3 percent). Nonresidential construction gained 16,100 jobs in September, led by nonresidential specialty trade contractors (12,300 jobs) and followed by heavy and civil engineering (2,600 jobs) and nonresidential building (1,200 jobs).
The construction unemployment rate was 3.5 percent in September. Unemployment across all industries was 4.2 percent.
“Industry employment growth is increasingly concentrated on the nonresidential side as the data center boom continues to support rapid hiring of certain specialty trade contractors,” Basu says. “Contractor hiring expectations remain elevated, according to ABC’s Construction Confidence Index, an outlook that seems justified given the insatiable demand for new data centers.
“At the same time, the residential segment continues to hemorrhage workers,” he adds. “That side of the industry has now shed 1 percent of its employment base over the past year.”
Related: An economist’s midyear outlook of the construction economy