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# Data Center Demand Surges Amid Decline in Private Construction
- URL: https://www.industrialbriefs.com/data-center-demand-surges/
- Published: 2026-08-12T21:00:25.000Z
- Updated: 2026-08-12T21:30:49.000Z
- Description: Nonresidential construction spending increased slightly in June, but private nonresidential projects face a 7.9% decline despite a thriving data center market. Opportunities abound for AECM businesses in data center construction.
- Author: IndustrialBriefs
- Tags: construction, engineering, #enriched

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Nonresidential construction spending in the U.S. experienced a modest rise of 0.1% in June, according to an analysis by the Associated Builders and Contractors (ABC) based on U.S. Census Bureau data. However, the underlying figures reveal a more complex picture, with private nonresidential construction spending suffering a notable decline of 7.9% year-over-year, despite a booming data center sector.

**What Happened**  
Nonresidential construction spending reached $1.277 trillion on a seasonally adjusted annual basis in June, with both public and private segments showing a 0.1% increase. Notably, private nonresidential spending fell to $745.3 billion, marking a significant drop from its peak in April 2025\. Anirban Basu, ABC's chief economist, highlighted that excluding data centers, [private nonresidential construction spending](https://www.industrialbriefs.com/us-construction-backlog-lowest-level/) decreased by 0.6% in June and 7.9% over the past year. This decline is most pronounced in manufacturing construction, which saw a sharp year-over-year decrease of 21.4%. Conversely, [data center construction](https://www.industrialbriefs.com/walbridge-stargate-data-center-groundbreaking/) rose by 7% in June and surged 46% over the year, reflecting robust demand in this sector.

**What This Means for Your Business**  
For businesses operating in the architecture, engineering, construction, and manufacturing (AECM) sectors, the contrasting trends in construction spending present both challenges and opportunities. The decline in private nonresidential construction signals a potential slowdown in traditional projects, which may impact contract availability and profitability. However, the booming data center market offers a lucrative avenue for contractors and suppliers. Companies with capabilities in data center construction can capitalize on the higher demand and backlog, as evidenced by the 13% of ABC members engaged in this sector enjoying significantly longer backlogs of 11 months compared to 8.5 months for others. Businesses should also anticipate potential cost implications and competitive pressures as more firms pivot towards data center projects.

**What US Operators Should Watch**  
U.S. operators should closely monitor federal funding opportunities and procurement windows that could arise from the increased focus on digital infrastructure. Staying attuned to upcoming regulations and compliance requirements related to data center construction will be crucial, especially as cybersecurity standards and sustainability practices evolve. Decision-makers should also track market trends and technological advancements in data centers to maintain a competitive edge and optimize return on investment.

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*Source:* [*https://www.metalconstructionnews.com/news/data-center-boom-masks-7-9-decline-in-private-nonresidential-construction-spending/*](https://www.metalconstructionnews.com/news/data-center-boom-masks-7-9-decline-in-private-nonresidential-construction-spending/?ref=industrialbriefs.com)