Spending on construction projects in October increased by 0.5 percent compared to September, according to an analysis of government data released by the Associated General Contractors of America (AGC). The growth was primarily driven by a significant rise in residential improvements and a slight increase in public works spending.
Ken Simonson, AGC’s chief economist, commented on the findings: “Our survey of contractors found widespread expectations of growing demand for data centers and power projects, but expectations are subdued for all other types of projects compared to the 2025 Outlook Survey. On balance, more contractors expect a decline rather than an increase in spending on five project types, compared to just two negative readings a year ago.”
The AGC noted that contractors’ outlooks were particularly pessimistic regarding elementary and secondary schools, higher education facilities, and lodging construction—sectors that had previously been expected to grow. Expectations have also worsened for private office and retail construction since last year.
In total, construction spending reached $2.18 trillion at a seasonally adjusted annual rate in October. This figure represents a 0.5 percent monthly increase but is down 1.0 percent from October 2024 levels. Residential improvements—such as additions and renovations to owner-occupied homes—increased by 4.5 percent and accounted for most of the overall gain. Public construction spending rose slightly by 0.1 percent.
However, these gains were offset by declines in several sectors: single-family homebuilding dropped by 1.3 percent; private multifamily construction decreased by 0.2 percent; and private nonresidential spending also fell by 0.2 percent.
Within major private nonresidential categories, manufacturing construction declined by 0.9 percent while private power project spending edged up by 0.1 percent. Commercial construction grew modestly at 0.2 percent but private office building contracted by 0.4 percent overall—with data center investments rising by 1.2 percent even as traditional office space development fell sharply.
Public sector trends varied as well: highway and street work increased slightly (up 0.1 percent), educational building rose (up 0.7 percent), but transportation-related projects slipped (down 0.1 percent).
The association said these results align with its recently published 2026 Construction Hiring and Business Outlook survey, which indicated lower expectations across most market segments this year.
Jeffrey D. Shoaf, AGC’s chief executive officer, stated: “There are steps federal officials can take to encourage more construction activity while making the economy more productive,” adding that “cutting red tape, making go or no-go decisions more quickly and continuing to invest vital infrastructure will boost employment, stimulate new economic activity and make the American economy even more competitive.”
