U.S. Construction Spending to Decline in 2026
Total industry spending is forecast to drop 3.4 percent to $2.167 trillion as several key sectors experience significant pullbacks.
Updated on Oct. 16, 2026 in Construction
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The construction industry faces a downturn in 2026, with total spending across the United States projected to reach $2.167 trillion. While total volume is expected to slide 3.4 percent, the forecast highlights a sharp divergence between stalling residential sectors and surging infrastructure demand.
Why it matters
The decline reflects cooling in residential and manufacturing segments, though aggressive growth in data center and power infrastructure continues to buoy specific market areas. This shift underscores a broader transformation in the nation's building priorities driven by digital demand.
Total construction spending is projected at $2.167 trillion, while the FMI Nonresidential Construction Index dropped to 51.7 in the fourth quarter. Data center spending is the notable exception, with a forecast increase of 49 percent.
The players
FMI
FMI is a management consulting and investment banking firm that provides research and insights into the engineering and construction industries.
The details
Residential construction spending is set to fall 5.9 percent to $881 billion, while manufacturing projects face a nearly 20 percent decline. Meanwhile, data center construction is expanding rapidly to meet demands for artificial intelligence and cloud computing, despite ongoing challenges with equipment delivery and electrical infrastructure limits.
Timeline
Total U.S. construction spending is expected to decline throughout 2026.
Power construction spending is projected to increase 8.1 percent in 2027.
Data center spending has the potential to reach $144 billion by 2030.
Market Landscape
This contraction follows the trajectory set by the FMI Nonresidential Construction Index, which recently hit 51.7. The industry is currently shifting away from traditional office and manufacturing builds toward specialized infrastructure, signaling a major reallocation of capital and labor.
The forecast suggests that firms may need to adjust their project pipelines, as 87 percent of companies report having open craft positions and 7 percent higher input prices. Consumers and businesses should anticipate potential project delays tied to the ongoing equipment delivery bottlenecks.
The takeaway
The construction industry is reorienting toward digital infrastructure and power, even as broader residential and manufacturing markets contract. Stakeholders should account for ongoing labor shortages and supply chain constraints when planning long-term projects.
Further reading
For more on industry shifts, visit our Construction section.
Source note: This article includes information reported by Walls and Ceilings Magazine.
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