Avdotia
U.S. construction spending fell again in July, down 0.5% from June to a seasonally adjusted annual rate of $2,157.6 billion, and 3.8% below where it stood a year earlier. Avdotia Services is reading past the headline number to the one detail that explains almost all of it: without data centers, nonresidential construction spending would be at its lowest level since September 2023.
What the report actually shows
The U.S. Census Bureau’s construction spending report, released September 1, put July’s total at $2,157.6 billion, down from a revised June estimate of $2,167.7 billion. Nonresidential spending rose on paper, but Associated Builders and Contractors Chief Economist Anirban Basu attributed the entire increase to data centers, noting that “nonresidential activity is increasingly concentrated in a single sector,” with power projects supporting data centers doing most of the lifting. Strip that category out, and nonresidential spending has now fallen for two straight months to its weakest level in nearly three years.
An Associated General Contractors of America analysis of the same report pointed to a similarly narrow base holding the numbers up: data centers, power projects, and highway work are effectively the only categories keeping construction spending from a sharper decline, and all three carry their own exposure to worker shortages, tariffs, and the possibility of a federal funding lapse for highway programs.
Why one sector propping up the whole number is a problem
Avdotia Services, working across construction and real assets from avdotia.work, treats concentration risk in a spending report the same way it treats concentration risk in a tenant roster: a number that looks stable because one category is doing all the work is not actually stable. Data center construction depends on continued AI infrastructure investment, power capacity, and utility approvals — all of which Avdotia Services has flagged as live constraints in Florida’s own data center pipeline. If any one of those slows, the national spending number does not have a second engine to fall back on.
For a Florida contractor or developer reading the national report, the practical takeaway is narrower than the headline: unless a project sits inside data centers, power, or highways, the broader nonresidential environment is softer than the topline $2,157.6 billion figure suggests, not stronger.
How Avdotia Services reads this
Avdotia Services uses reports like this one as a check on optimism built from a single favorable indicator. A client evaluating a nonresidential build in 2026 should ask which category their project falls into before assuming the sector’s aggregate momentum applies to them — office, manufacturing, and most commercial construction are moving in the opposite direction from the number that makes headlines. Avdotia.work’s method treats a headline figure as a starting question, not an answer, which is exactly the gap between “nonresidential spending rose” and “nonresidential spending rose because of one category” that this report exposes.
The takeaway
Construction spending’s July decline is real, but the more useful fact is what is propping up the parts that didn’t decline: a narrow set of categories carrying spending that would otherwise be falling across the board. Avdotia Services will keep watching whether that concentration deepens or broadens as 2026 closes out, because a market this dependent on three categories is one downgrade away from a very different headline number.