[REVISION HISTORY]

US construction sector spending and labor trends

Updated 2 times since CLSTR started tracking revisions of this situation.

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2026-09-01 17:56 UTC → 2026-09-02 14:36 UTC · added ~~removed~~

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.

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