Con Dig (02-Jun-26) US nonresidential construction spending edged higher in April, supported by continued strength in public-sector projects, while private construction activity declined for a seventh consecutive month, according to new analysis from the Associated Builders and Contractors (ABC).
Data released by the United States Census Bureau showed national nonresidential construction spending increased 0.1% in April to a seasonally adjusted annual rate of $1.25 trillion.
The modest gain masked a growing divergence within the market. Public nonresidential construction spending rose 0.4% during the month, while private nonresidential spending fell 0.2%.
Of the 16 nonresidential construction categories tracked by the Census Bureau, 10 recorded spending increases in April.
Public infrastructure drives growth
According to ABC chief economist Anirban Basu, April’s increase was driven entirely by government-funded construction activity.
“Nonresidential construction spending inched higher in April, but that growth was entirely due to a sizable increase in public sector activity,” Basu said.
The latest figures underscore the increasingly important role public investment is playing in sustaining construction activity as private-sector development remains under pressure from higher financing costs and broader economic uncertainty.
Federal infrastructure programs, transportation projects, utilities, and public facilities continue to provide a steady source of demand for contractors, helping offset weakness in several commercial and industrial segments.
Private construction slump extends
Private nonresidential construction spending has now declined for seven consecutive months and is nearly 8% below the record high reached in December 2023, according to ABC.
Much of that slowdown has been linked to a sharp reduction in large-scale manufacturing projects that were previously supported by incentives under the CHIPS and Science Act. Those projects helped fuel a surge in factory construction over the past several years, creating a significant source of growth for the sector.
As that wave of investment moderates, contractors are finding fewer areas of strength across the broader private construction market.
“Private sector construction momentum has been difficult to find outside of the still-ascendant data center segment,” Basu said.
Data centers remain construction bright spot
One segment continuing to outperform is data center construction.
Spending on data centers, which is reported within the office construction category, rose 1.9% in April to a seasonally adjusted annual rate of $50.7 billion. Over the past 12 months, spending in the segment has surged 28.1%.
The rapid growth reflects continued investment by technology companies, cloud service providers, and artificial intelligence developers racing to expand computing capacity and digital infrastructure.
The sector has become one of the most significant drivers of nonresidential construction activity in the United States, helping support contractor backlogs even as other private construction markets soften.
Outlook remains mixed
According to ABC, strong demand for data center construction has helped support contractor confidence and maintain healthy backlog levels across much of the industry.
However, challenges remain.
Basu warned that rising construction material costs and continued weakness across several commercial sectors could eventually begin to weigh on contractor sentiment.
“Those data center projects have buoyed the ABC Construction Backlog Indicator and kept ABC members confident about their outlooks, at least on the whole,” he said. “While that particular tailwind will persist for some time, rising materials prices and a lack of momentum in many commercial segments may eventually weigh on contractor sentiment.”
The latest spending data suggests the US nonresidential construction market remains supported by infrastructure and public-sector investment, but the slowdown in private development activity continues to create an increasingly uneven landscape for contractors heading into the second half of 2026.