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Data center construction spending hits record $85 billion annual pace

Buildouts now make up about 63% of all private office construction in the US, Census data shows

By LineZotpaper
Published
Read Time2 min
Private data center construction spending has reached a record annual pace of $84.95 billion, up 73% year over year, according to the US Census Bureau's construction spending tables for August. The growth is the fastest since April 2025's 88.2% jump, and data center buildouts now account for roughly 63% of all private office construction.

The Census Bureau's monthly Value of Construction Put in Place report, released last week, shows private data center construction spending has grown from $49.05 billion to $84.95 billion on an annualized basis. The figures exclude the value of racks or servers inside data centers, and the Bureau does not speculate on the cause of the increase.

The gap between data center and general office construction spending now stands at $39.1 billion, the widest since the series began in January 2014. General office construction is at $45.8 billion, down 9.7% year over year and 34.8% since January 2023. Data centers have outpaced general office spending every month since September 2025, and are now more than nine times their January 2021 level of $9.26 billion.

Data centers are also driving the wider construction picture. Private nonresidential construction stood at $773.0 billion, down 1.0% year over year, or $688.1 billion and down 5.9% if data centers are excluded. Of the $8.0 billion monthly rise in private nonresidential spending, $5.9 billion, or 74%, came from data centers. Manufacturing construction is down 19.8% year over year, with data center construction now about half its size. Power construction, up 9.7%, was the other major gainer, reflecting electricity demand from data centers.

Associated Builders and Contractors chief economist Anirban Basu said in a September statement that July's nonresidential gain was "entirely due to data centers," and that power construction growth was boosted by their electricity needs. Growth has accelerated for four consecutive months: May was up 36.3% year over year, June 55.2%, and July 65.3%.

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Analysis

Why This Matters

  • Data centers have become the primary growth engine for US nonresidential construction, shaping the broader building economy.
  • The trend signals sustained investment in computing infrastructure, with implications for power demand, land use and the commercial property market.
  • General office construction continues to shrink, widening the gap between the two categories to its deepest level since 2014.

Background

Data center construction has expanded rapidly as demand for digital services and computing capacity has climbed. The Census Bureau's definition covers buildings containing hardware for storing, processing and transmitting digital information, while power plants and transmission lines built for data center demand are tracked separately. The current figures show construction industry growth increasingly concentrated in this one segment.

Key Perspectives

Data center developers and their customers: They are continuing to pour capital into new facilities, driving record spending and making data centers the largest share of private office construction. Construction economists: Analysts such as Anirban Basu see data centers and related power infrastructure as essentially the entire source of recent nonresidential gains. Skeptics: The heavy concentration of growth raises questions about what happens if investment slows, while the power grid strains under rising electricity demand from new facilities.

What to Watch

  • Whether the monthly year-over-year growth rate continues to accelerate or begins to cool.
  • Power construction spending, a key signal of whether electricity infrastructure is keeping pace.
  • Further declines in general office construction, which would extend the record gap between the two sectors.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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