Data Center Construction Hit a $96 Billion Annual Rate in September

The Census Bureau's September construction spending report, released Nov. 2, put data center construction at a $96 billion seasonally adjusted annual rate, up 8.6 percent from August and 90 percent from September 2025. Associated Builders and Contractors, analyzing the same release, said data centers accounted for virtually all of the month's nonresidential growth. The category has grown at a 217 percent annualized rate since May. The figure covers buildings and site work only; it does not include the electrical equipment that ultimately feeds the servers.

Nonresidential construction spending totaled $1.325 trillion at an annual rate, up 0.6 percent for the month and 1.8 percent for the year, its sixth consecutive monthly increase. Total construction spending fell 1.9 percent for the month and 2.7 percent from a year earlier, dragged down by residential, which dropped 5.4 percent. Power plants and distribution infrastructure stood at $192 billion, up 11.1 percent year over year. Manufacturing construction held near $170 billion, roughly stable for three months but down about 17 percent from September 2025. Eight of the 16 nonresidential subcategories rose.

For commercial electricians the composition matters more than the total. ABC Chief Economist Anirban Basu said that excluding data centers and the closely related power category, nonresidential spending fell in September. Commercial, healthcare and education construction each declined for the month. The office category, which is where Census books data center work, was up 33.4 percent from a year earlier. Measured from the start of 2021, data center spending is up roughly 950 percent, against 63 percent for power and 128 percent for manufacturing, and manufacturing has since come off the peak that drove fab and battery plant hiring.

That shifts the mix of available work toward medium-voltage distribution, substation and switchgear installation, generator yards, bus duct and uninterruptible power supply systems, and away from tenant fit-outs and process work in factories. It also shifts which contractors hold the backlog. Basu said market dynamics will continue to favor larger contractors far more likely to be involved in data center and power projects, even as contractors remain busy in the aggregate.

The hiring consequence follows the backlog. Openings concentrate at large electrical contractors that can prequalify, bond and prefabricate at hyperscale, while shops built on commercial, healthcare and education work face a flat market. Public nonresidential spending slipped 0.1 percent for the month while private nonresidential rose 1.1 percent, another sign that private AI investment rather than public budgets is setting the pace. Costs are climbing underneath all of it: the producer price index for construction materials was up 11.0 percent year over year in September, and nonresidential construction services up 14.0 percent.

ConstructConnect's chief economist noted that military, hospital and warehouse construction are also up 30 percent or more nationally, so the growth is not data centers alone. Basu expects momentum to stay narrowly concentrated in artificial-intelligence-related segments over the next several months. For an electrician weighing employers, the September numbers are a map of where the backlog sits.