CreditMarket noteSunday 11 October 2026, 00:30
Data centre building is up 73% in a year. The rest of US construction is shrinking
Spending on US data centre construction reached an $85.0bn annual rate in August. Private building outside data centres fell 5.3%, and AI deals made up more than half of net bond supply.
By The Notebook Desk
The fastest-growing part of American construction is the data centre, and by a wide margin. Private firms were spending at an annual rate of $85.0bn on data centre construction in August, 73% more than a year earlier, according to the Census Bureau’s monthly figures. Four years earlier, in August 2022, the rate was $13.1bn. Spending has grown more than six times since then.
Most other building is going the other way. Private construction outside data centres fell 5.3% in the year to August, by our calculation from the same table. Spending on homes fell 4.8%, on factories 19.8% and on warehouses 8.1%. Total construction spending, private and public, was 1.7% lower than a year earlier, the Census Bureau said on 1 October.
| Data centres | +73.2% |
|---|---|
| Power | +9.7% |
| Homes | −4.8% |
| Warehouses | −8.1% |
| Factories | −19.8% |
| All private, excluding data centres | −5.3% |
Source: US Census Bureau, Construction Spending, 1 October 2026. Seasonally adjusted annual rates, not adjusted for prices. The total excludes data centres, by our calculation.The Macro Notebook
Two economies in one table
Data centres now take 11.0% of all private non-residential construction spending, up from 6.3% a year earlier. Power projects, which include the plants and lines that new data centres need, grew 9.7%. The Census figures do not say how much of the power spending serves data centres, so the data centre line alone may understate how much building AI now drives.
The weak parts are the ones most exposed to interest rates and to the wider economy. Factory spending is now a third below its level of August 2024. Warehouse spending peaked in 2023 and has fallen in each year since, on the August figures. Home building, the largest category of all, is lower than a year ago.
The figures are in current dollars and are not adjusted for building costs. If costs rose over the year, the fall outside data centres is larger in real terms.
The bond market tells the same story
AI is not only the biggest builder. It is also the biggest borrower. AI-related issuance has made up more than half of net supply in the US investment-grade bond market so far this year, Apollo says. Net supply is new bonds minus those that mature, so it measures how much fresh borrowing the market has to absorb. Apollo expects total issuance of investment-grade corporate bonds to top $1.8tn this year, which would be a record.
Much of that money goes into the same buildings. The big cloud companies that are building AI infrastructure are issuing large volumes of investment-grade debt, Apollo notes. It expects about a trillion dollars more of their spending to be financed through private markets over the next few years.
For bond investors this is a new kind of concentration. A few borrowers, all spending on the same thing, now take a large share of the market’s fresh supply. Their credit is strong today, and the big cloud companies have deep cash flows from other businesses. But the newer and smaller firms in the chain, which rent out data centres or build them on credit, depend on the AI companies’ sales growing as promised.
When one industry does the growing
An economy in which one industry does most of the growing is exposed to that industry. If AI spending slows, there is little elsewhere in construction to take its place: homes, factories and warehouses are all shrinking. Last week showed how quickly sentiment can turn. A report that OpenAI’s revenue was lower than investors had thought knocked 8% off CoreWeave and almost 6% off Oracle in a day, as we report today.
None of this means the building will stop. Data centre spending rose another 7.5% in August alone, from July. But the more the economy leans on one kind of building, the more a change of mind among a few large companies would show up in the national figures.
What to watch next
The next construction figures, for September, will show whether data centre spending is still accelerating. The big cloud companies report third-quarter results in the coming weeks. Their spending plans for 2027, and how they plan to pay for them, will decide where much of next year’s bond supply comes from.
Disclosure
This is analysis and opinion, not investment advice.