WASHINGTON, November 3, 2026 — U.S. construction spending fell 1.9% in September as a sharp decline in residential projects overwhelmed growth in business construction, according to the latest Census Bureau report released Monday.
Total spending dropped to a seasonally adjusted annual rate of $2.1861 trillion from a revised $2.2274 trillion in August. Private residential spending plunged 5.5%, while private nonresidential construction increased 1.1%, highlighting a widening divide between housing activity and other construction projects.
The decline reversed much of August’s upwardly revised 2.0% increase, previously reported as 0.9%. Compared with September 2025, total construction spending was 2.7% lower.
The figures point to renewed weakness in an important part of the U.S. economy, although spending on offices, energy infrastructure and other nonresidential projects continued to provide support.
Housing Drives Decline
Private residential construction spending fell to an annualized $848.8 billion in September from $898.0 billion in August, a decrease of approximately $49.2 billion in the reported annualized spending rate. Yet the Census Bureau’s detailed figures show that new-home construction was not responsible for most of the decline.
Spending on new single-family homes was essentially unchanged at $403.4 billion, while new multifamily construction edged up 0.1% to $115.9 billion. The difference points to a much sharper contraction in residential improvements.
Investozora’s calculation from the Census Bureau’s Table 1 puts the implied private residential improvements category at approximately $329.5 billion in September, down from $378.7 billion in August. That represents a roughly 13.0% decline.
The calculation subtracts new single-family and multifamily construction from total private residential spending, using the same seasonally adjusted annualized basis. This distinction matters because the broader residential figure includes improvements to existing homes, not just construction of new houses and apartment buildings.
Investozora Calculation
Analysis of U.S. Census Bureau construction spending data shows that implied private residential improvement spending fell approximately 13.0% in September 2026, even as new single-family and multifamily construction spending remained broadly stable.
Implied Private Residential Improvements
Calculation Methodology
Investozora calculated implied private residential improvements by subtracting spending on new single-family and multifamily construction from total private residential construction spending. All inputs are in millions of dollars, seasonally adjusted at annual rates.
September 2026: 848,777 − 403,436 − 115,888 = 329,453
August 2026: 897,995 − 403,477 − 115,814 = 378,704
Percentage change: [(329,453 ÷ 378,704) − 1] × 100 = −13.0%
The implied improvements figures are Investozora calculations, not separately published Census Bureau estimates. The figures use current-dollar, annualized data and are subject to subsequent revisions.
Key finding: Private residential spending declined by approximately $49.2 billion at an annualized rate between August and September, compared with a $41.2 billion decline in total construction spending. Gains elsewhere in construction therefore partly offset the residential weakness. These amounts represent changes in annualized spending rates, not actual spending losses during one month.
View Official Construction Spending Data
U.S. construction spending by category, September and revised August 2026. Dollar values are in billions at seasonally adjusted annual rates.
| Indicator | Sep 2026 | Aug 2026 | Change |
|---|---|---|---|
| Total construction | $2,186.1B | $2,227.4B | −1.9% |
| Private construction | $1,639.3B | $1,680.3B | −2.4% |
| Private residential | $848.8B | $898.0B | −5.5% |
| New single-family | $403.4B | $403.5B | 0.0% |
| New multifamily | $115.9B | $115.8B | +0.1% |
| Private nonresidential | $790.6B | $782.3B | +1.1% |
| Public construction | $546.8B | $547.1B | −0.1% |
Source: U.S. Census Bureau, Monthly Construction Spending, September 2026, Table 1. Released November 2, 2026. August figures are revised. Changes are rounded as reported.
Primary source: U.S. Census Bureau, Monthly Construction Spending, September 2026, release CB26-176, Tables 1 and 2, November 2, 2026.
Official Construction Spending Data Tables · Survey Methodology · Category Definitions
Research attribution: Investozora original calculation using Census Bureau data. Values are rounded for display; underlying formulas use published figures in millions of dollars. Current-dollar estimates are preliminary and subject to revision.
The Census Bureau’s construction definitions include remodeling, additions, major replacements and other qualifying improvements, while excluding ordinary maintenance and repair. The report does not establish why renovation spending fell so sharply.
Nevertheless, the concentration of the decline in improvements suggests that the September deterioration was different from a straightforward collapse in new-home building. The figures also provide a useful comparison with Investozora’s earlier reporting on housing starts and new home sales, which track different stages of housing activity.
September 2026 Construction Spending by Sector
Month-over-month percentage change
| Sector | Period | Monthly change |
|---|---|---|
| Private residential | Sep 2026 | −5.5% |
| Private nonresidential | Sep 2026 | +1.1% |
| Public construction | Sep 2026 | −0.1% |
| Total construction | Sep 2026 | −1.9% |
Reading the chart: Monthly changes compare September 2026 with revised August 2026 estimates. Total construction includes private and public construction; the four bars are not additive.
Source: U.S. Census Bureau, Construction Spending, September 2026 . Released November 2, 2026. Seasonally adjusted annual rates.
Business Construction Grows
While residential spending weakened, private nonresidential construction rose 1.1% to an annualized $790.6 billion from $782.3 billion in August. Private office construction increased 5.5% to approximately $145.6 billion, while spending on private power projects rose 1.2% to $171.7 billion.
The gains contrast with a 0.3% decline in private manufacturing construction, which remained 17.9% below its September 2025 level. Office construction was particularly strong, rising 39.5% from a year earlier. The Census Bureau’s office category includes data centers, although the broad office figure alone does not establish how much of September’s increase came from those facilities.
Overall, private construction spending fell 2.4% to $1.6393 trillion, with the residential downturn outweighing improvements in nonresidential activity. Public construction was comparatively steady, declining just 0.1% to $546.8 billion.
Highway and street construction slipped 0.3% to $149.2 billion, while educational construction was virtually unchanged at $113.1 billion. The contrasting performances show why the headline decline should not be interpreted as an equally severe pullback across the entire construction industry.
Housing Market Pressure
Construction spending is one measure of the economic activity generated by residential development, remodeling, commercial buildings and public infrastructure. Weakness in residential improvements can affect contractors, suppliers, renovation businesses and companies that provide construction-related materials and services.
It also comes against a challenging borrowing-cost environment for households. Investozora has tracked recent developments in mortgage rates, homebuilder confidence and the broader housing market. Higher financing costs can discourage purchases, remodeling and property investment, although September’s construction report does not independently establish how much of the decline was caused by interest rates, material prices or other factors.
The distinction also matters for monetary policy. Changes in Treasury yields can influence mortgage financing conditions, while the relationship between Federal Reserve decisions and household borrowing costs is not automatic.
September’s report is therefore evidence of weaker construction spending, particularly in residential improvements, rather than proof of an imminent recession or a predetermined Federal Reserve decision.
Revisions and Outlook
The September report also substantially revised the previous month’s figures. August construction spending was raised to $2.2274 trillion from the initially reported $2.2031 trillion. Its monthly increase was revised to 2.0% from 0.9%.
The revised August level makes the September comparison more informative: the latest decline followed a considerably stronger month than initially estimated. For the first nine months of 2026, actual construction spending totaled $1.6496 trillion on a nonannualized basis, down 2.9% from the corresponding period in 2025.
The Census Bureau cautions that monthly construction estimates can fluctuate and that preliminary figures are subject to revision as additional information becomes available. Its reported September decline of 1.9% carried a margin of error of plus or minus 0.7 percentage points at a 90% confidence level, indicating that the overall decline was statistically significant.
The figures are also measured in current dollars, without adjusting for construction-price changes. They should not be interpreted as a direct measure of inflation-adjusted construction output. The next test will be whether residential improvements recover while private nonresidential building maintains its momentum.
The Census Bureau is scheduled to release October 2026 construction-spending estimates on December 1, 2026, at 10 a.m. Eastern. Until then, September’s figures leave a clear picture: U.S. construction activity weakened sharply, and the housing-related decline was concentrated far more heavily in improvements to existing properties than in new-home construction.
