Data Centers Drove Sept. Nonresidential Spending as Other Sectors Fell
Data center construction spending rose 8.6% in September, and ABC’s analysis puts annualized growth in that segment since May at 217%, while other nonresidential work softened, Construction Dive reports.
Market Impact
Private nonresidential construction spending increased 1.1% month over month in September, according to a U.S. Census Bureau report released Monday. It was the sixth consecutive monthly gain. The 8.6% data center jump and the 217% annualized figure come from Associated Builders and Contractors (ABC), not the Census Bureau. Both are ABC’s analysis of the federal data, so treat them as ABC’s calculation.
ABC chief economist Anirban Basu said data centers accounted for virtually all of the increase. “Excluding data centers and the closely related power category, nonresidential spending actually fell in September,” he said. He expects the artificial intelligence buildout to keep driving growth. He also expects momentum to hold over the next several months, citing recent rises in Treasury yields and ongoing materials price escalation.
The Associated General Contractors of America (AGC) shows the same split over the past year. Data center spending is up 90%, and private electric power investment is up 14% from September 2025. All other private nonresidential categories combined are down 7.8%. AGC chief economist Ken Simonson said data center and power demand is masking cutbacks elsewhere. He added that it is also straining supply chains and costs, which are already pressured by high tariffs and international conflicts.
What It Means for Subcontractors
Construction Dive’s report doesn’t break out trades. The trade-level takeaways below are our inference from the spending data.
- Electrical and power contractors: Data centers and the “closely related” power category are the two sectors holding up nonresidential spending. Private electric power investment is up 14% year over year. Pre-qualify now with owners and GCs on both data center and power projects to protect your backlog.
- Mechanical, civil and site-work subs: The 217% annualized growth since May is ABC’s figure, and Basu expects the trend to continue near-term. Decide this quarter how much crew and equipment capacity to commit to data center sites versus other work. Spending on other private nonresidential categories is down 7.8% year over year (AGC).
- Firms reliant on commercial, office or other private nonresidential work: Spending outside data centers and power fell in September. If most of your bids sit in those categories, rebalance your pipeline toward data center and power packages before first-quarter bidding.
- Estimators and purchasing: Basu cites ongoing materials price escalation, and Simonson cites tariffs and international conflicts straining supply chains. Add escalation language to open proposals and get supplier quotes with expiration dates. Do this on any data center subcontract package you price now.
- Concentration risk: Nearly all of the growth sits in one sector. Set a cap on how much of your backlog depends on a single owner type, and review it each quarter.
