Construction spending fell 1.9% in September as home improvement spending dropped
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Construction spending fell 1.9 percent in September to a seasonally adjusted annual rate of $2,186.1 billion, the U.S. Census Bureau reported November 2. The drop from August's revised $2,227.4 billion was statistically significant, and spending was 2.7 percent below September 2025.
Nearly all of the decline came from housing. Private residential construction fell 5.5 percent in the month, to $848.8 billion, while private nonresidential construction rose 1.1 percent, to $790.6 billion. Spending on new single-family homes, $403.4 billion, and new multifamily buildings, $115.9 billion, was essentially unchanged.
The rest of private residential spending is improvements to existing homes. Subtracting new single-family and multifamily construction from the private residential total, improvement spending fell from about $378.7 billion in August to $329.5 billion in September, about 13 percent, and was about 18 percent below a year earlier. The bureau notes that it can take months to see a trend in specific categories.
| Rank | Category | September 2026 | Change from September 2025 |
|---|---|---|---|
| 1 | Office | $162.3B | +33.4% |
| 2 | Religious | $7.1B | +21.6% |
| 3 | Conservation and development | $15.3B | +14.3% |
| 4 | Power | $191.7B | +11.1% |
| 5 | Highway and street | $150.9B | +3.9% |
| 6 | Commercial | $122.9B | −4.0% |
| 7 | Lodging | $25.0B | −4.2% |
| 8 | Public safety | $21.5B | −7.6% |
| 9 | Residential | $861.2B | −8.8% |
| 10 | Manufacturing | $170.2B | −17.0% |
Office construction, the category where the bureau counts data centers, kept climbing. It rose 5.0 percent in September to $162.3 billion and was up 33.4 percent from a year earlier. Manufacturing construction was $170.2 billion, down 17.0 percent. A year ago, factory building ran $83.4 billion ahead of office building at annual rates. In September the gap was $7.9 billion, down from about $15 billion in August after revisions.
Private office spending alone was $145.6 billion, up 39.5 percent from September 2025. Power construction, the largest nonresidential category at $191.7 billion, was up 11.1 percent from a year ago.
Public construction held steady at $546.8 billion, 0.1 percent below August, a change the bureau says is not statistically significant. Public highway spending was $149.2 billion and public educational construction $113.1 billion.
The bureau also revised August upward. It first reported August spending at $2,203.1 billion and now puts it at $2,227.4 billion, $24.3 billion higher. Through the first nine months of 2026, spending totaled $1,649.6 billion, 2.9 percent less than in the same months of 2025.
The housing slowdown shows up in other Census reports too. Single-family building permits fell to their lowest rate since March 2023 in September, as we reported in September's housing starts, and the office-versus-factory trend was the main story in August's construction report. The October report is due December 1.
Sources
U.S. Census Bureau, Monthly Construction Spending, September 2026, release CB26-176, November 2, 2026, and the construction spending tables. Figures are seasonally adjusted annual rates and are not adjusted for inflation. The improvements estimate subtracts new single-family and new multifamily spending from total private residential spending. Statements about statistical significance follow the bureau's 90 percent confidence intervals.
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How much was construction spending in September 2026?
Construction spending was a seasonally adjusted annual rate of $2,186.1 billion in September 2026, 1.9 percent below the revised August figure and 2.7 percent below September 2025, the Census Bureau reported November 2.
Why did construction spending fall in September?
Private residential spending fell 5.5 percent. Spending on new single-family and multifamily homes was essentially flat, so the drop came from improvements to existing homes. Private nonresidential spending rose 1.1 percent.
When is the next construction spending report?
The Census Bureau's October 2026 construction spending report is scheduled for release on December 1, 2026. It will also revise the September figures, which the bureau labels preliminary.
