Nonresidential construction spending decreased 0.3% in January and is up 1% compared with January 2025, according to Associated Builders and Contractors.
For public construction, spending was up 0.6% for the month and is up 4.5% year to date. Private nonresidential spending decreased 0.4% in January and is down 3% year to date. Spending was down for the month in nine of the 16 nonresidential subcategories.
“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 ABC Chief Economist Anirban Basu. “While harsh winter weather likely bears some blame, the major issue is the ongoing decline in computer/electronic manufacturing construction. With CHIPS Act-incentivized megaprojects wrapping up, spending in that subcategory is down nearly 40% over the past 18 months.
“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,” Basu continued. “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. 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.”
