Con Dig (01-Jul-26) Private nonresidential construction spending continued its downward trend in May, declining for the seventh consecutive month as manufacturing, warehouse and office projects remained under pressure despite continued strength in data center development.
According to an analysis released on Wednesday by the Associated Builders and Contractors (ABC) of new data from the United States Census Bureau, national nonresidential construction spending fell 1.5% in May to a seasonally adjusted annual rate of $1.267 trillion.
Private nonresidential construction spending slipped 0.3% from April, while public nonresidential spending increased 0.4%. Overall, spending increased in 11 of the 16 nonresidential construction categories during the month.
ABC Chief Economist Anirban Basu said the private sector continues to struggle, with spending now down 6.6% compared with May 2025.
“Private nonresidential construction spending shrank for the seventh consecutive month in May and is now down 6.6% on a year-over-year basis,” Basu said.
He attributed much of the weakness to declining manufacturing construction activity as projects supported by the CHIPS and Science Act continue to wind down.
While some sectors have remained resilient, Basu said they are too small to offset declines across larger segments of the market.
The amusement and recreation sector continues to post healthy growth, while religious construction has rebounded over the past year. However, warehouse construction spending has now fallen for three consecutive months and is down 8.5% from a year earlier. Spending in the general office category has also continued to weaken, falling 11.9% since May 2025.
Data center construction remains the industry’s brightest spot, according to ABC.
Basu pointed to the organization’s latest Construction Backlog Indicator, which found contractors with data center work reported average backlogs of 11.6 months, compared with 8.6 months for firms without projects in the sector.
The figures suggest demand for digital infrastructure continues to support portions of the nonresidential construction market even as broader private-sector investment remains under pressure.