Construction Spending Fell 1.9% in September. What It Means for Your 2027 Project
U.S. construction spending fell 1.9% in September 2026, led by a 5.5% drop in residential. Here's what the Census numbers show and how a builder reads them for spring 2027 projects.
U.S. construction spending fell 1.9% in September 2026, to a seasonally adjusted annual rate of $2,186.1 billion, the Census Bureau reported on Nov. 2. Residential spending took the biggest hit, dropping 5.5% from August.
The short version
Total construction spending is down 2.7% from September 2025 and 2.9% for the first nine months of the year. Residential fell hardest. Private nonresidential spending rose 1.1%, driven mostly by data centers, according to KPMG’s read of the data. Our take for homeowners: a slower market doesn’t change what a patio, wall or drain costs to build right, but winter is the time to get spring 2027 work designed and bid.
What the Census numbers show
| Category | September 2026 (annual rate) | Change from August |
|---|---|---|
| All construction | $2,186.1 billion | -1.9% |
| Private residential | $848.8 billion | -5.5% |
| Private nonresidential | $790.6 billion | +1.1% |
| Public | $546.8 billion | -0.1% |
Through the first nine months of 2026, the Census Bureau puts spending at $1,649.6 billion, 2.9% below the same stretch of 2025. Trading Economics called the September drop the steepest monthly decline since April 2020.
KPMG’s economists note that this was the 14th month in a row with spending below the year before. They put private residential down 8.9% from a year earlier and say September’s drop came mostly from fewer home improvements, reversing an August surge. New single-family spending was flat for the month and down 2.4% from a year ago.
Where the money is still going
The growth that is left is narrow. KPMG reports data center construction hit a record $96.5 billion annual rate, up 90% from a year earlier, and private power projects rose to $171.7 billion. Excluding data centers and power, KPMG figures private nonresidential spending fell 8.2% year over year. Manufacturing construction is down 18% from last year.
Public spending barely moved: down 0.1% for the month, with highway spending down 0.3%, per the same KPMG summary.
What it means if you’re planning a 2027 project
National numbers don’t set the price of your patio, but they shape the season. Here’s how we’d read it as a builder:
- Use the winter. Design and bids take weeks. Getting them done in December through February puts you at the front of the line when ground thaws. Our guide to planning a patio in winter walks through the order.
- Don’t read a slow market as a reason to take the cheapest bid. When work is scarce, some bids get thin by cutting base depth, drainage or haul-off. Compare scopes line by line. See why patio quotes differ from online cost guides.
- Check the contractor, not just the price. In Pennsylvania, home improvement contractors register with the Attorney General, and on jobs over $5,000 the deposit is capped at one-third of the price plus special-order materials. Our hardscape contractor guide covers what to ask.
Builder’s note: A down month for national construction doesn’t change the physics of a patio or a retaining wall. Base depth, drainage stone and compaction take the same material and labor in a slow market as a busy one. If one 2027 bid comes in well under the others, find out which of those three got cut before you sign.
Sources: U.S. Census Bureau, Monthly Construction Spending, September 2026 (Nov. 2, 2026); KPMG, September 2026 construction spending analysis; Trading Economics, US Construction Spending Unexpectedly Falls (Nov. 2, 2026)
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Written and reviewed by Thayne Muthler, owner of Muthler Landscaping & Construction (PA HIC #PA212584). How we check facts: editorial policy.