Private Nonresidential Construction Slows for Fourth Straight Month
Total non-residential construction spending was virtually unchanged in January, according to an Associated Builders and Contractors analysis of federal data.
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On a seasonally adjusted annualized basis, nonresidential spending totaled $1.245 trillion.
“Private nonresidential construction spending contracted for the fourth consecutive month in January and is now down 8% from the December 2023 all-time high,” said A Anirban Basu, ABC chief economist.
Spending was down monthly in 9 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.4%, while public non-residential construction spending was up 0.6% in January.
“While harsh winter weather likely bears some blame, the major issue is the ongoing decline in computer/electronic manufacturing construction,” Basu said. “With CHIPS Act-incentivized megaprojects wrapping up, spending in that subcategory is down nearly 40% over the past 18 months.”
He noted that with the exception of data centers, which saw another 2% jump in spending during January, there are few sources of momentum to offset the precipitous decline in manufacturing construction activity.
“This lackluster performance is especially concerning in light of the ongoing conflict in Iran, which will ignite materials price escalation and heighten already elevated levels of economic uncertainty,” Basu said. “While ABC’s Construction Backlog Indicator rebounded slightly in February, rising 0.1 months from January’s four-year low, it may be a difficult first half of 2026 for many contractors.”
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