Data center construction spending hits record $85 billion annual pace

Private data center construction spending is up over 73%, from $49.05 billion to $84.95 billion, year over year (YoY), according to the Census Bureau’s detailed construction spending tables for August. Spending is at a record annual pace, and growth is the fastest since April 2025’s +88.2%. Data center buildouts are now about 63% of all private office construction. The report, released last week, uses Census definitions that exclude any value of “racks or servers in data centers” from its construction spending numbers. It also does not speculate on any cause of the spending increase.

The Census data covers the Value of Construction Put in Place, measured monthly, to calculate what a full year would total at that month’s pace. Data center construction is defined as “[including] buildings that contain the hardware needed for storing, processing, and transmitting digital information,” a subcategory of private office. Power plants and transmission lines built to meet data center power demand fall under Census’s separate power category.

The $39.1 billion gap between general office and data center construction spending is the widest in the series since Census data begins in January 2014. The former is at $45.8 billion, down 9.7% YoY and 34.8% since Jan. 2023. Data centers have, in fact, beaten the general office every month since Sept. 2025.

Data center construction now sits at over nine times its Jan. 2021 level of $9.26 billion. Data center construction has become the majority of private office construction, about 63% versus 47% a year earlier, and with forecasts for data center power use still climbing, that is likely to remain the case moving forward.

Private nonresidential construction was at $773.0 billion, down 1.0% YoY, or $688.1 billion and down 5.9% YoY if data centers are excluded. Of the $8.0 billion monthly rise in private nonresidential spending, $5.9 billion or 74% was for data centers. Manufacturing, down 19.8% YoY, fits the same pattern, and data center construction is now about half its size.

Power construction, up 9.7% YoY, is the other big gainer. Taken together, the picture painted is that the construction industry’s growth depends heavily on data center projects. This follows Associated Builders and Contractors chief economist Anirban Basu’s statement in a Sept. 1 release that July’s nonresidential gain was “entirely due to data centers,” and that power’s growth was boosted by their electricity needs.

Growth has gotten faster for four months now. In addition to August’s reported gain, May was +36.3% YoY, June was +55.2%, and July saw +65.3% by our math. As the numbers do not include server spend, which is also growing due to rising hardware costs from AI demand, the Census only shows part of the picture. The acceleration in construction is nevertheless a strong indicator of where things are headed. September’s results are expected on Nov. 2 and may continue the trend.