What’s Really Driving the Construction Market? (It’s Not Just Data Centers)

KEY POINTS

• U.S. Nonresidential construction spending rose 14.8% year to date through July 2026, led by a 20.6% increase in Nonresidential Building spending.

• Data centers drove much of the growth, with spending up 148.5%, while Manufacturing spending declined 32.2%.

• Excluding Data Centers and Manufacturing, Nonresidential construction still grew a healthy 10.4%, signaling broad market strength.

Headline spending figures point to a strong U.S. construction market: Total Nonresidential construction spending rose 14.8% year to date through July 2026, with Nonresidential Building up 20.6% and Civil construction up 5.7%.

Nonresidential Building covers structures such as Offices, including Data Centers, Schools, Hospitals, and Manufacturing plants.

But the headline obscures an uneven market, with gains and contractions concentrated in just a few major categories, especially data centers. 

Data Centers and Manufacturing Drive an Outsized Effect

From January through July 2026, Offices, including Data Centers, and Manufacturing accounted for nearly 40% ofNonresidential Building spending by dollar value. Their contrasting performances had an outsized effect on the overall market. 

• Offices, including Data Centers: The largest Nonresidential Building cate gory reached $92.8 billion in spending, an increase of 148.5% through July. 

• Manufacturing: The second-largest Nonresidential Building category totaled $47.9 billion, but spending is down 32.2%. 

Together, these categories show why the headline growth rate does not tell the whole story. The data center boom is providing a powerful boost, offsetting contracting manufacturing starts as the subcategory moves through a cyclical lull. 

A further analysis shows what is really going on with U.S. construction starts. 

The Broader Market is Still Growing 

Most of the other major Nonresidential categories have had a relatively modest effect on total spending through July.

Road construction recorded a $4.9 billion increase. Water, Sewage, and Treatment spending rose by $2.8 billion. Junior and Senior High Schools increased 5.6%, representing a gain of $1.8 billion. 

Removing Offices, including Data Centers, and Manufacturing from year to-date starts through July reduces total Nonresidential growth from 14.8% to 10.4%. That is a slowdown, but it still represents a relatively strong rate of expansion. 

Growth is being supported by a range of mid-sized categories, including Hospitals and Clinics, Nursing Homes and Assisted Living, Prisons, and Military construction. Several of these segments are up 50% or more, with Prison construction increasing by more than 300%.

Looking Beyond the Headlines

The data center boom is lifting the overall construction market, but it is not the whole market. Removing the year’s largest sources of volatility still leaves a positive picture of Total Nonresidential construction, with growth at a healthy 10.4% through July.

The broader view is that the U.S. Nonresidential construction is growing, but that growth rotated among categories. Looking beyond the top-line figures provides a more accurate view of the market’s underlying strength. 

Stay Connected

Stay connected with ConstructConnect News for construction industry news and construction market analysis to stay ahead of what’s building next.

Read the Construction Economy Snapshot for more details on construction starts, trends, and regional analysis. 

About ConstructConnect

At ConstructConnect, our software solutions provide the information construction professionals need to start every project on a solid foundation. For more than 100 years, our insights and market intelligence have empowered commercial firms, manufacturers, trade contractors, and architects to make data-driven decisions and maximize productivity.

ConstructConnect is a business unit of Roper Technologies (Nasdaq: ROP), part of the Nasdaq 100, S&P 500, and Fortune 1000.

For more information, visit constructconnect.com