National nonresidential construction spending increased 0.1% in July, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.286 trillion.

Spending was down on a monthly basis in 8 of the 16 nonresidential subcategories. Private nonresidential construction spending was up 0.4%, while public nonresidential spending was down 0.2% in July.

“The increase in nonresidential construction spending that occurred in July was entirely due to data centers,” said ABC Chief Economist Anirban Basu. “Excluding that booming category, nonresidential spending fell for the second straight month and is down to the lowest level since September 2023.

“Nonresidential activity is even more concentrated given that the power category, which has been boosted by the electricity needs of data centers, has also grown substantially over the past year,” said Basu. “While contractors remain upbeat about their sales over the next six months, according to ABC’s Construction Confidence Index, that upbeat outlook is increasingly dependent on a single sector.”

The construction industry had 326,000 job openings on the last day of July, according to an Associated Builders and Contractors analysis of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings increased by 28,000 last month and are up by 21,000 from the same time last year.

“The construction job opening rate rose to the highest level in nearly two years in July,” said ABC Chief Economist Anirban Basu. “Contractor hiring also accelerated for the month, while layoff activity slowed. This meaningful improvement in labor demand is a function of insatiable demand for data centers and the accompanying strength in power-related construction.

“With contractors broadly optimistic about expanding their staffing levels over the next six months, according to ABC’s Construction Confidence Index, it’s possible that reemerging worker shortages will put upward pressure on labor costs over the next several months.”

Overall construction and nonresidential input prices both increased 0.1% in July compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price data.

Construction input prices are 7.4% higher than one year ago, while nonresidential construction input prices are 7.2% higher. Prices decreased in 2 of the 3 energy subcategories last month. Crude petroleum prices decreased 11.9%, and unprocessed energy materials decreased 7.4%. Natural gas prices were up 10.4% in July.

“Construction input prices were virtually unchanged in July, but that relatively tame behavior can be traced to the dip in fuel prices that occurred at the start of the month,” said ABC Chief Economist Anirban Basu. “Diesel fuel prices, for instance, surged more than $0.50 per gallon from the week prices were measured for the index through the end of July. Given the subsequent rebound in oil prices and ongoing increases in certain materials prices, such as lumber and iron and steel, materials prices will almost certainly continue to climb in the months to come.

“Materials prices remained up more than 7% on a year-over-year basis in July,” said Basu. “Despite this significant annual increase and the prospect of ongoing inflation, contractors on net expect their profit margins to expand over the next six months, according to ABC’s Construction Confidence Index.”

Associated Builders and Contractors reported today that its Construction Backlog Indicator fell to 8.0 months in July, according to an ABC member survey conducted July 20 to Aug. 4. The reading is down 0.8 months from both a month and year ago. 

View the full Construction Backlog Indicator and Construction Confidence Index data series.

Every industry, region and company size experienced a decline in backlog in July. The South remains the only region with larger backlog than one year ago. 

ABC’s Construction Confidence Index readings for sales and staffing levels also fell in July, while the reading for profit margins increased. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“Backlog fell sharply in July and is down to the lowest level since January,” said ABC Chief Economist Anirban Basu. “The data center boom masks the depth of this weakness, as there is a lack of momentum in any other segment. The 88% of ABC contractors that are not under contract to work on a data center had an average 7.5 months of backlog. That compares poorly to the 12% that are under contract to work on data centers, which have 11.4 months of backlog. This dynamic has been particularly difficult for small and mid-size contractors. Backlog in the $30-$50 million annual revenue category, for instance, fell to the lowest level since March 2020.”

The construction industry recorded 305,000 job openings on the last day of June, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings increased by 14,000 last month and are up by 81,000 from the same time last year.

“Interpreting these data is often challenging,” said ABC Chief Economist Anirban Basu. “One could take these figures at face value and conclude that construction is thriving and driving demand for workers higher. Indeed, ABC’s Construction Confidence Indicator shows that the average contractor expects rising revenues and employment over the next six months.

“But June’s construction spending report indicates that overall residential and nonresidential construction spending continues to decline,” said Basu. “Accordingly, one might look for other explanations for rising construction job openings, including demographic considerations.

“Many contractors view a structural shortfall of skilled labor as their primary challenge because many highly experienced, productive workers are retiring,” said Basu. “It is conceivable that these workers are being replaced with less skilled and productive workers, thereby requiring a few workers to be replaced by many.

“Alternatively, the data may not be capturing all that transpires,” said Basu. “It may be that certain people who had been working in construction were doing so without proper documentation. At least some of these workers are no longer available at jobsites, inducing faster hiring and expanding job openings as contractors work to replace them.”

National nonresidential construction spending rose 0.1% in June, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.277 trillion.

Spending was up on a monthly basis in 8 of 16 nonresidential subcategories. Both public and private nonresidential spending were up 0.1% in June. Private nonresidential construction spending was down nearly 5% from a year ago.

“Through April 2025, private nonresidential construction spending ascended to $806.1 billion on a seasonally adjusted annual rate basis, an all-time high,” said ABC Chief Economist Anirban Basu. “Since then, that figure has expanded only three times over the past 14 months.

“Despite an ongoing data center construction boom, private nonresidential construction spending has declined to a seasonally adjusted annual rate of $745.3 billion since the April 2025 peak, which translates into a decline exceeding 7%,” said Basu. “Tellingly, private nonresidential construction spending excluding data centers fell 0.6% in June 2026 and is down 7.9% year over year.

“Meanwhile, data center construction was up 7% in June and up 46% from a year ago. Contractors working on data centers continue to benefit from this momentum. According to ABC’s latest Construction Backlog Indicator, the 13% of ABC members under contract to work on data centers have significantly higher backlog (11.0 months) than the 87% that are not (8.5 months).”

By Luiza Mills, Interstate Electrical Services Corporation

Meta Platforms Inc. and Associated Builders and Contractors, Inc., our chapter’s national parent organization, recently announced a partnership to educate and provide construction-ready career pathways for thousands of data center construction technicians as a meaningful step toward meeting the growing demand for data centers workers.  Unfortunately, the Healey/Driscoll administration’s subsequent framework for data center construction in Massachusetts, which includes a provision promoting project labor agreements, will effectively shut our member firms out of the process due to the PLA’s union labor requirement and, more broadly, is a disincentive to private development in the Commonwealth.  

America’s Workforce Academy is a $115 million investment in the next generation of construction professionals that includes a five-week training program and a job offer from contractors working on Meta projects at the conclusion of the program. It creates another pathway into the construction industry and can serve as a precursor to a formal open shop or union apprenticeship program.

“America’s Workforce Academy is a transformational endeavor creating incredible careers in construction.  ABC is proud to work with Meta, CBRE and academy community partners to welcome all who want to build their career dreams as construction professionals,” said Michael Bellaman, ABC president and CEO. “ABC believes in creating opportunities for all on a level playing field and is ready to meet the industry’s needs and help individuals achieve their career dreams.  ABC is honored to partner with Meta to expand the pipeline of data center construction workers.

The American Workforce Academy partnership will: 

• Build a Sustainable Talent Pipeline: establishes scalable, repeatable workforce development models that align industry, training providers and workforce systems to meet ongoing demand.
• Deliver Accelerated, Job-Ready Training: provides standardized, industry-aligned training that equips participants with the skills, safety knowledge and jobsite readiness needed to contribute quickly and effectively.
• Ensure Safety and Productivity from Day One: prepares participants to meet industry and project-specific safety standards and contribute productively on the jobsite from the outset.

But excitement about the partnership was quickly dashed when the Healey/Driscoll administration made PLAs a condition for receiving state tax incentives for data center projects.  With the PLA, the Commonwealth is effectively telling businesses that if they want to build in Massachusetts, they don’t have the option of using ABC members on their privately funded projects.  The benefit from tax incentives will also be offset by the additional cost of building with a PLA.

Meanwhile, other states are aggressively supporting data centers and not imposing burdensome construction requirements.  The imposition of PLAs on private development will only exacerbate the challenges we face in attracting businesses to the Commonwealth.  Meta is just one example of the scores of national corporations that have established relationships with ABC members and other open shop contractors across the country.  

As Bellaman said, “The sustained demand for data center construction technicians means the industry needs an all-of-the-above approach to address this shortage and grow the construction talent pool.”

We hope the Healey/Driscoll administration will consider these points and reconsider its framework for data center construction in Massachusetts. 

Construction input prices decreased 1.1% in June compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices also decreased 1.1% for the month.

Overall construction input prices are 7.6% higher than one year ago, while nonresidential construction input prices are 7.4% higher. Prices decreased in 2 of the 3 energy subcategories last month. Crude petroleum prices declined 12.1%, and unprocessed energy materials fell 8.1%. Natural gas prices were up 16.6% in June.

“Aggregate construction input prices receded in June due to the steep decline in oil prices that occurred throughout the month,” said ABC Chief Economist Anirban Basu. “Despite that decline, however, ongoing materials price escalation is likely over the coming months. The conflict in Iran has resumed, triggering a roughly 15% rebound in oil prices, and tariff-affected commodities like iron, steel and copper continue to experience steep price increases.

“While contractors remain optimistic about their margins, according to ABC’s Construction Confidence Index, higher input costs will likely weigh on profitability during the second half of 2026," said Basu.

The construction industry had 298,000 job openings on the last day of May, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings increased by 32,000 last month and are up by 76,000 from the same time last year.

“Construction job openings rose to a 10-month high in May,” said ABC Chief Economist Anirban Basu. “Unfortunately, that increase likely reflects exceptional demand for certain occupations critical to data center buildouts, like electricians, rather than increased industrywide demand for labor.

“The construction hiring rate fell sharply in May and, at 3.5%, matches February’s all-time low," said Basu. "Rising layoff activity and a falling quit rate also suggest that demand for construction labor weakened in May. Despite these signs, contractors remain optimistic about growing their staffing levels, according to ABC’s Construction Confidence Index.” 

National nonresidential construction spending slid 1.5% in May, according to an Associated Builders and Contractors analysis of U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.267 trillion.

Spending was up on a monthly basis in 11 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.3%, while public nonresidential construction spending was up 0.4% in May.

“Private nonresidential construction spending shrank for the seventh consecutive month in May and is now down 6.6% on a year-over-year basis,” said ABC Chief Economist Anirban Basu. “This weakness is largely due to the ongoing decline in manufacturing-related construction spending as CHIPS Act-supported projects wind down, yet overall there are few sources of momentum in the segment.

“Yes, the amusement and recreation category continues to grow at a healthy pace, and the religious category has rebounded meaningfully over the past year,” said Basu. “But those modestly sized segments are far too small to carry the broader nonresidential market, especially given the weakness in larger categories. For instance, warehouse construction spending, which appeared to stabilize at the start of 2026, has now fallen for three consecutive months and is down 8.5% year over year, while the general office category remains in a state of freefall, down 11.9% since May 2025.

“For now, momentum remains largely concentrated in the data center segment,” said Basu. “As seen in ABC’s most recent Construction Backlog Indicator release, those fortunate enough to have data center work have significantly longer backlogs (11.6 months) than those that do not (8.6 months).”