Construction's Scarce Momentum
Renovations, data centers, & that's it
Construction Trend Tuesday covers one (hopefully) interesting industry trend in a quick, two-minute read. You can access the archive of CTT posts here.
Private construction spending has fallen by nearly 1% since the start of 2024. To the extent the segment has any momentum, it’s entirely confined to two categories: residential improvements and data centers. Without those two categories, private nonresidential spending would be down by a 9% over the past two years.
The data center boom has been much discussed, including in this newsletter, but the surge residential improvements has flown miles below the radar.
What’s driving the increase? A few guesses:
High mortgage rates cause some would-be-movers to instead change their current home to suit their needs.
An expectation of falling mortgage rates makes some will-be-movers start preparing their homes for the market.
Aging-in-place Baby Boomers.
The housing stock isn’t getting any younger.
This is pretty normal. Residential renovation work holds up better than other categories when activity contracts. About $1 in every $4 spent on private construction went to residential renovations in January 2026, just below the April 2011 all-time high.
What’s Next
Next up is a critically important inflation release on Friday. We’ll cover that and a lot more in Week in Review, our every-Friday post that covers all the economic news and data in a breezy, five minute read.
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