Data Centers Drive All July Nonresidential Construction Growth

Industry Pulse News Desk · 2026-09-03

Nonresidential construction spending excluding data centers dropped to its lowest level since September 2023, according to industry economic data.

Nonresidential construction spending in July relied entirely on data center developments to achieve net growth, as activity across the remainder of the commercial building sector fell to its lowest point since September 2023.

Excluding the rapid expansion of data storage and processing facilities, nonresidential construction outlays experienced a broad decline during the month. The divergence highlights a growing reliance on technology infrastructure to support national building figures, even as traditional commercial projects stall.

Capital allocations for facilities supporting cloud computing, digital networks, and artificial intelligence hardware sustained strong momentum throughout July. In contrast, spending on standard commercial structures—including retail centers, office towers, and general warehouse facilities—softened considerably under current market conditions.

Chief economist Anirban Basu noted that without the robust surge in data center development, total nonresidential spending would have registered a clear monthly contraction. Persistent headwinds, including elevated borrowing rates, strict commercial lending criteria, and rising input costs, continue to weigh on developer confidence and delay new project starts.

The performance underscores how specialized high-tech investments are insulating the broader construction industry from a deeper downturn. While technology companies maintain heavy capital commitments to digital infrastructure, general nonresidential construction activity is projected to remain subdued until macroeconomic pressures and financing costs begin to moderate.