# US construction sector spending and labor trends

> Live situation record from CLSTR: https://clstr.news/situations/us-construction-sector-slowdown
> Updated: 2026-09-01T15:12:19.000Z. Sources: 15. Developments: 4.

In early August, data showed U.S. construction spending slipped 0.1% in June and was down 3.2% year‑over‑year, missing economists’ expectations. Forecasts from consulting firm FMI projected the sector would continue to contract through 2026, with steep declines expected in manufacturing construction and single‑family home building, while home‑improvement spending was slated to rise.

The next day, labor statistics revealed the construction industry had 305,000 open positions at the end of June, an increase of 14,000 from the prior month and 36% higher than a year earlier. Analysts linked the rise in vacancies to a tightening labor market rather than growth, citing an aging workforce and the loss of undocumented laborers as key drivers.

By July, the sector exhibited conflicting trends. While total construction starts rose 25.6%—driven by a 107.9% surge in office and data center projects—total construction spending fell 0.5% to a seasonally adjusted annual rate of $2,157.6 billion. This spending decline was primarily fueled by a 1.3% drop in private residential spending. Overall, spending remained down 3.8% compared to July 2025, as analysts noted market volatility driven by megaprojects and sector-specific shifts.

Recent data for July confirms these divergent trends, with total construction starts rising 25.6% to a seasonally adjusted annual rate of $1.79 trillion, supported by a 57.7% jump in nonresidential building starts. However, total construction spending fell 0.5% to $2,157.6 billion, driven by a 1.3% drop in private residential spending. 

Broader economic indicators suggest a cooling labor market. ADP reported that private sector payrolls increased by only 38,000 in August, missing the projected 47,000. While education, health, and leisure sectors added jobs, manufacturing and professional services saw declines, signaling a transition toward more moderate economic activity.

## Timeline

### 2026-09-01: US economic data shows slowdown in construction and job growth

US economic indicators show signs of a slowdown, with construction spending falling in July and August private payroll growth missing expectations at 38,000 jobs.

6 sources. https://clstr.news/cluster/us-economic-data-shows-slowdown-in-construction-and-job-growth

### 2026-09-01: US construction starts rise 25.6% in July amid spending decline

US construction starts rose 25.6% in July driven by nonresidential projects, but total construction spending fell 0.5% due to a decline in residential activity.

4 sources. https://clstr.news/cluster/us-construction-starts-rise-256-in-july-amid-spending-decline

### 2026-08-04: US construction sector sees 14,000 more job openings in June

U.S. construction job openings rose to 305,000 in June, up 14,000 month‑over‑month and 36% year‑over‑year, amid declining construction spending and a skilled‑labor shortage.

3 sources. https://clstr.news/cluster/us-construction-sector-sees-14000-more-job-openings-in-june

### 2026-08-03: US construction spending drops in June, projected to decline further in 2026

US construction spending fell 0.1% in June, with residential and manufacturing sectors weakening, and forecasts show a 1.3% drop in total spending for 2026.

2 sources. https://clstr.news/cluster/us-construction-spending-drops-in-june-projected-to-decline-further-in-2026

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Cite as: US construction sector spending and labor trends. CLSTR, https://clstr.news/situations/us-construction-sector-slowdown