Not good news. Here’s a look at Construction Spending data. My forecast for 2026 is expected down 3.2%.

Residential down 5.9% and Nonres Bldgs down 5.0%. Nonbldg UP 4%. Overall, this would be the worst annual performance since 2010. Some recent revisions lowered Rsdn. 2026 Construction Spending in constant dollars (all years corrected for inflation) is expected down 7.4%. Also biggest drop since 2010.

Good news is I’m expecting (as of right now only) to see a 2% increase in total spending in 2027. Rsdn flat, Nonres Bldgs +3%, Nonbldg +4%. But even that will not be enough to outpace inflation, so Constant $ spending will post about a 2% decline.

Construction spending Current$ is down only 5 of last 10 qtrs and is forecast to increase in each of next 6 qtrs, BUT,

Constant$ spending (spending minus inflation = Constant$ volume) has declined in 8 of last 10 qtrs., a total down -11.5%. and is forecast down each of the next 6 qtrs, total -2.5%.

The gulf between construction jobs and the actual value of work put-in-place (volume of business) is widening. Since Jan’25, jobs have increased 4%. The constant$ value of business put-in place has fallen 12%.

If constant$ volume is declining, the amount of work available to keep the workforce employed is falling. This is not a good environment to expect jobs growth. In fact, when volume is declining, even if jobs stay level, productivity is falling. If jobs are increasing, productivity is falling faster.

The residential numbers are bad, but the worst of the Nonres Bldgs is the decline from Mnfg projects, and that was entirely predicted. When you have a huge influx of projects all start in a compact period, the tailend of those projects creates a very steep downward slope to get back to normal.

The biggest decline in Nonres Bldgs spending is once again Manufacturing. This is expected. I wrote about the Mnfg spending taper two years ago (see The Manufacturing Spending Taper). Mnfg will account for $44bil in reduced spending this year. This pattern is going to be repeated in Data Centers in coming years.

Year-to-date thru July already, Mnfg is down 22%, but that is -$29bil. Data Center are up 35% but that’s only +$10bil.

When I get more free time, I’ll expand of this much more. But for now this is the preliminary forecast as of July spending.