Commercial construction activity in 2026 has been shaped by strong nonresidential investment, major technology and data center projects, and continued volatility from month to month.
While individual monthly construction-start figures have fluctuated considerably, the broader year-to-date trend remains positive. According to Dodge Construction Network, total U.S. construction starts were 15.2% higher year-to-date through August 2026 compared with the same period in 2025. Nonresidential building starts increased 23.4%, while commercial and industrial construction starts rose 47.7% over the same period. [1]
For lenders, developers, and other stakeholders financing commercial construction, these numbers point to continued activity across the market while reinforcing the importance of evaluating projects individually as costs, schedules, market conditions, and project complexity continue to vary.
For additional context, NWM Risk Management previously examined many of the trends leading into this year in Commercial Construction Starts in 2025: A Year of Divergence and Opportunity.
Commercial Construction Remains Active
Construction starts have experienced significant month-to-month movement throughout 2026.
In May, total construction starts increased 34.1% to a seasonally adjusted annual rate of $1.78 trillion. Dodge attributed much of the increase to megaprojects in healthcare, manufacturing, utilities, and data centers. [4]
Starts then declined in June before rebounding 25.6% in July to a seasonally adjusted annual rate of $1.79 trillion. Nonresidential building starts increased 57.7% during the month. [3]
August brought another adjustment. Total construction starts declined 24.8% from July to a seasonally adjusted annual rate of $1.34 trillion. Nonresidential building starts fell 32.0%, residential starts declined 5.2%, and nonbuilding starts decreased 26.7%. [1]
However, the monthly decline does not necessarily indicate a broader contraction.
Dodge characterized August as a normalization following July’s surge in megaproject activity. Despite the monthly decrease, year-to-date construction activity remained ahead of 2025 levels. [1]
Through August 2026:
- Total construction starts were up 15.2%
- Nonresidential building starts were up 23.4%
- Nonbuilding construction starts were up 22.2%
- Commercial and industrial starts were up 47.7%
- Residential starts were down 1.8% [1]
The figures show that much of 2026’s construction growth has been concentrated on the nonresidential side of the market.
Data Centers Continue to Influence Construction Activity
One of the defining trends of the 2026 construction market has been the scale of data center development.
Some of the country’s largest projects beginning construction this year have involved hyperscale data centers and the infrastructure needed to support continued demand for cloud computing and artificial intelligence.
In August, the largest nonresidential projects breaking ground included the $3.5 billion Amazon STACK Blanchard State Line Data Center in Louisiana and the $3.2 billion Clarksville Hyperscale Data Center in Arkansas. [1]
July included even larger developments. The month’s biggest nonresidential starts included the $12.8 billion data center portion of Project Jupiter in New Mexico, the $12 billion Micron semiconductor facility in New York, and a $4 billion Amazon data center in Louisiana. [3]
Data centers have also had a significant effect on construction planning statistics. Dodge reported that weaker data center planning was the primary factor behind flatter commercial planning activity in August. [2]
Because individual megaprojects can significantly affect monthly construction-start statistics, lenders and developers should consider both headline numbers and the underlying composition of the market when evaluating construction trends.
The Construction Pipeline Remains Active
Projects currently in the planning stages can also provide insight into future nonresidential construction activity.
The Dodge Momentum Index, which tracks nonresidential building projects entering planning, stood at 282.0 in August 2026, down just 0.4% from July. [2]
Commercial planning declined 3.0% during the month, while institutional planning increased 4.9%. Dodge reported that planning slowed for data centers, retail stores, and warehouses, while office buildings, parking garages, and hotels gained momentum. [2]
The numbers suggest that the nonresidential pipeline remains active across multiple sectors even as the mix of projects continues to evolve.
Construction Starts and Construction Spending Are Different Measures
When reviewing the construction market, it is important to distinguish between construction starts and construction spending.
Construction-start data measures projects beginning construction and can therefore move considerably when particularly large projects break ground.
The U.S. Census Bureau’s Value of Construction Put in Place survey, by comparison, provides monthly estimates of the dollar value of construction work performed in the United States across private and public residential and nonresidential projects. [5]
According to the Census Bureau, value of construction put in place measures the value of construction installed or erected at a project site during a particular period. It can include costs for materials, labor, contractor profit, architectural and engineering services, certain overhead costs, and interest and taxes paid during construction. [6]
The Census Bureau also notes that the total value for a period includes work performed on all projects underway during that period, regardless of when each project originally began. [6]
Because commercial projects can take months or years to complete, construction spending and construction-start data provide different perspectives on market activity.
What the 2026 Market Means for Construction Lenders
Strong construction activity creates opportunities for lenders, but a busy market does not eliminate project-level risk.
Large development pipelines can place additional pressure on contractors, subcontractors, materials, scheduling, and project management. At the same time, changing construction costs, financing conditions, leasing activity, and local market fundamentals can affect a project’s feasibility throughout the construction process.
For lenders, several areas remain especially important in 2026:
Budget feasibility. A detailed review of construction costs can help determine whether the proposed budget appropriately reflects the plans, specifications, project scope, and local market conditions. NWM provides additional guidance on this process through its resources on commercial construction and plan and cost reviews.
Contingency levels. Adequate contingency becomes particularly important when projects face material-price uncertainty, design changes, scope adjustments, or unforeseen construction conditions.
Construction progress. Regular site inspections help lenders evaluate whether reported progress corresponds with the work completed at the property before additional loan proceeds are released. NWM Risk Management’s construction progress monitoring services provide lenders with independent visibility into project progress.
For more detail on how monitoring fits into lender oversight, see Bank Required Construction Loan Monitoring Inspections: Requirements and Best Practices for Lenders.
Change orders. Significant or frequent change orders can affect both the project’s remaining budget and its ability to reach completion within the original loan structure. NWM discusses change orders and other warning signs in 5 Red Flags in a Construction Draw Request.
Stored materials and deposits. As developers secure long-lead materials and equipment, lenders should carefully evaluate documentation, storage conditions, insurance, ownership, and the risks associated with funding materials that have not yet been incorporated into the project.
Project schedule. Construction delays can create additional carrying costs and potentially affect interest reserves, contractor expenses, leasing plans, and loan maturity dates.
When rising costs, delays, change orders, or other concerns begin affecting a project’s ability to reach completion within the remaining budget, lenders may need a deeper financial review. NWM explains this process in When a Construction Project Starts Going South: Why a Cost to Complete Report Matters.
Looking Ahead
The 2026 construction market demonstrates why individual monthly construction-start figures should be viewed within a broader context.
August construction starts declined substantially from July, but year-to-date activity remained 15.2% above the same period in 2025, with nonresidential starts up 23.4% and commercial and industrial starts up 47.7%. [1]
At the same time, the Dodge Momentum Index indicates that a significant pipeline of nonresidential projects remains in planning, even as the mix of projects continues to change. [2]
For construction lenders, continued market activity reinforces the importance of consistent project-level due diligence throughout the life of a construction loan.
NWM Risk Management provides nationwide construction risk management and due diligence services for lenders, including plan and cost reviews, construction progress monitoring, draw inspections, property condition assessments, and other construction risk management services designed to provide independent insight into project budgets, progress, and potential risks.
Lenders looking to strengthen oversight across their construction portfolios can also read How to Reduce Risk in Construction Lending.
Sources
[1] Dodge Construction Network. Construction Starts Fall Back 24.8% in August. September 21, 2026.
[2] Dodge Construction Network. Dodge Momentum Index Flat in August. September 8, 2026.
[3] Dodge Construction Network. Construction Starts Rebound 25.6% in July. 2026.
[4] Dodge Construction Network. Construction Starts Swell 34% in May. June 18, 2026.
[5] U.S. Census Bureau. Construction Spending: About the Survey.
[6] U.S. Census Bureau. Construction Spending: Definitions.
