ConDig (21-Jan-26)  US nonresidential construction spending showed little movement in October and continued to trend lower on an annual basis, according to an analysis released Jan. 21 by Associated Builders and Contractors using data from the U.S. Census Bureau.

On a seasonally adjusted annualized basis, total nonresidential construction spending stood at about $1.25 trillion in October. Spending was essentially flat month over month and declined 0.9% compared with October 2024, ABC said.

Private nonresidential construction spending slipped 0.2% from September, while public nonresidential spending edged 0.1% higher during the month. Of the 16 nonresidential subsectors tracked by the Census Bureau, spending increased in nine on a monthly basis.

Despite modest gains in several categories, overall momentum remained weak, according to ABC chief economist Anirban Basu.

“Nonresidential construction failed to gather momentum at the start of 2025’s third quarter,” Basu said. “While there are few sources of private nonresidential growth outside of the still surging data center category, much of the recent decline in construction spending is due to a precipitous drop in manufacturing investment.”

Manufacturing construction spending has fallen by nearly 10% over the past 12 months, ABC said, reflecting the wind-down of large CHIPS Act-supported projects and the impact of trade policy uncertainty. That decline accounts for more than the entire drop in private nonresidential construction spending over the past year.

Public-sector categories, including transportation, highway and street, and power-related construction, remained comparatively stable, helping to offset weakness in private investment. However, several private-sector segments, including office, commercial and manufacturing construction, continued to show year-over-year declines.

Despite the soft data late in 2025, ABC said contractor sentiment remains relatively optimistic.

“Despite consistently downbeat construction industry data during the latter months of 2025, contractors remain upbeat about the first half of 2026,” Basu said, citing results from ABC’s Construction Confidence Index.

The data suggest that while public spending and select growth areas such as data centers continue to support activity, broader nonresidential construction faces ongoing headwinds tied to manufacturing pullbacks, financing conditions and policy uncertainty.