US construction spending fell 3.8% as factory building dropped 21%
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Construction spending ran at a seasonally adjusted annual rate of $2,157.6 billion in July, the Census Bureau reported September 1. That is 0.5 percent below the revised June figure of $2,167.7 billion and 3.8 percent below July 2025. Through seven months, spending totals $1,244.6 billion, down 3.5 percent from the same period last year.
Manufacturing construction fell 21.2 percent from a year earlier, the steepest decline of any category the bureau tracks. Office construction rose 16.9 percent, the steepest gain. In July 2025 factory building ran $95.7 billion ahead of office building at annual rates. The gap is now $29.7 billion.
| Category | July 2026 | Change from July 2025 |
|---|---|---|
| Conservation and development | $16.6B | +28.1% |
| Religious | $6.6B | +19.2% |
| Office | $140.1B | +16.9% |
| Power | $181.5B | +5.3% |
| Highway and street | $151.5B | +4.5% |
| Commercial | $122.5B | -4.9% |
| Residential | $871.2B | -7.3% |
| Public safety | $21.3B | -8.5% |
| Lodging | $24.7B | -9.6% |
| Manufacturing | $169.8B | -21.2% |
The office category is where data centers are counted
The bureau's category definitions list "data center" as a type of office building, covering structures that hold the hardware for storing, processing, and transmitting digital information. The same definitions exclude the racks and servers inside from the construction value, so the reported figure is the building and its fixed systems, not the expensive computing equipment.
Private office construction rose 21.3 percent over the year, from $101.7 billion to $123.3 billion at annual rates. Power construction supplies those buildings. It is up 5.3 percent, and at $181.5 billion it is the largest single nonresidential category, ahead of manufacturing.
The same buildout appears in the trade statistics. Computer imports for the year through July reached $220.8 billion, double the figure for the same months of 2025, and computer accessories rose 67 percent, as covered in the July trade report. Firm-level adoption is running well behind the construction: 22.4 percent of businesses told the bureau they used artificial intelligence in the two weeks ending August 9, covered in our report on business AI use.
Manufacturing construction peaked during the incentives created by the 2022 semiconductor and climate laws. At $169.8 billion it remains the second largest nonresidential category, but it has given back $45.8 billion of annualized spending in twelve months.
Residential construction fell 1.3 percent for the month to $859.0 billion and is down 7.3 percent for the year. New single family building dropped 3.2 percent in July to $395.2 billion, the largest monthly decline in the report. New multifamily was close to flat at $115.1 billion. Permits pointed to this cooling in June, which we covered in June housing starts and permits.
Public construction spending was $543.4 billion, down 0.2 percent for the month but up 1.7 percent over the year, making it the only broad segment growing. Highway construction reached $150.3 billion, up 4.5 percent from July 2025.
The August report is scheduled for October 1.
Sources
Figures are from the U.S. Census Bureau's Monthly Construction Spending report for July 2026 (CB26-140, released September 1, 2026), Table 1, seasonally adjusted annual rates. Category definitions, including the treatment of data centers, are from the bureau's construction category definitions. Estimates are adjusted for seasonality but not for price changes, and current-month figures are preliminary. The bureau notes it can take two months to establish a trend for total construction and as long as eight months for individual categories.
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How much did US construction spending fall in July 2026?
Construction spending was at a seasonally adjusted annual rate of $2,157.6 billion in July 2026, down 0.5 percent from the revised June figure of $2,167.7 billion and 3.8 percent below July 2025. The monthly change carries a margin of error of plus or minus 0.8 percent, so it is not statistically distinguishable from zero. The year-over-year decline is significant.
Are data centers counted in construction spending?
Yes, within the office category. The Census Bureau's category definitions list data center as a type of office building, covering structures that hold hardware for storing, processing, and transmitting digital information. The racks and servers inside are excluded as equipment, so the reported figure covers the building and its fixed systems only.
Why is factory construction falling?
Manufacturing construction ran at $169.8 billion in July 2026, down 21.2 percent from $215.6 billion a year earlier, a loss of $45.8 billion in annualized spending. The category peaked during the incentives created by the 2022 semiconductor and climate laws. It remains the second largest nonresidential category behind power.
