The latest data shows that the US construction market is moving away from the rapid growth seen after the pandemic and entering a more selective expansion phase, where increased activity in infrastructure, energy and data center projects is helping to balance weaker performance in several commercial real estate segments. As reported by the US Census Bureau, the total value of construction implemented, not seasonally adjusted, increased 1.3% year-over-year (YoY) in March 2026, after recording marginal year-over-year declines of 0.2% in February and 0.3% year-over-year in January 2026. Overall, the average value of construction implemented increased marginally by 0.3% year-over-year during the first three months of 2026. Across key segments, residential construction activity grew marginally by 0.8% year-on-year, while non-residential construction activity decreased marginally by 0.1% year-on-year during the same period.
Strong demand for artificial intelligence and cloud computing is driving further growth in the data center segment, which is also influencing overall non-residential construction growth. The latest data from the US Census Bureau indicates that private sector spending on data centers has increased significantly in recent years. Average data center spending grew 32% in 2025, rising from $31.1 billion in 2024 to $41 billion. Data center construction has nearly quadrupled over the past four years, rising from $9.9 billion in 2021 to $41 billion. Although data center spending accounted for only 1.9% of total construction spending and 3.3% of non-residential construction in 2025, it is the main sector driving growth. Excluding data center spending, non-residential construction saw a 1% contraction and general construction saw 0.7% growth in March 2026. According to the project pipeline tracked by GlobalData, as of early April 2026, there were 681 data center projects (over $25 million) in the national pipeline with a combined planned spending of $1.5 trillion. Of these, 395 projects worth $1 trillion remain in the pre-planning or planning stages, while 286 projects worth $467.4 billion are currently in the pre-execution and execution stages. However, according to a latest report from GlobalData, data centers are putting a huge strain on power grids, increasing energy costs and straining local infrastructure, so several states are proposing laws to prohibit development, with Maine expected to be the first to enact a moratorium.
On a monthly basis (MoM), conditions appear to be improving in March 2026 compared to February 2026, mainly because the residential sector has returned to growth, while the non-residential sector is also providing additional support through data centers. The residential construction sector regained momentum in March 2026, aided by increased single-family and multi-family activity and the ongoing housing shortage in major metropolitan markets, which are driving construction activity in the sector. Government-backed real estate incentives, housing demand driven by demographic trends and improved builder activity continued to support the sector, even though mortgage rates are still above historical averages. According to the Federal Reserve, in February 2026, consumer credit increased at a seasonally adjusted annual rate of 2.2%, compared to 1.8% in January 2026. However, broader housing expansion remains limited due to affordability challenges, higher labor costs and rising construction materials prices. Recent releases from the U.S. Census Bureau and the U.S. Department of Commerce also show that overall permitting activity has weakened, suggesting that developers remain cautious about starting new projects due to financial risks and slower rental growth in some urban markets. According to the US Census Bureau, the total number of new privately owned residential construction permits authorized in the country decreased 2.3% year over year in the first three months of 2026, following a 4.1% annual decline in 2025.