Spending was up on a monthly basis in 8 of 16 nonresidential subcategories. Both public and private nonresidential spending were up 0.1% in June. Private nonresidential construction spending was down nearly 5% from a year ago.

“Through April 2025, private nonresidential construction spending ascended to $806.1 billion on a seasonally adjusted annual rate basis, an all-time high,” said ABC Chief Economist Anirban Basu. “Since then, that figure has expanded only three times over the past 14 months.

“Despite an ongoing data center construction boom, private nonresidential construction spending has declined to a seasonally adjusted annual rate of $745.3 billion since the April 2025 peak, which translates into a decline exceeding 7%,” said Basu. “Tellingly, private nonresidential construction spending excluding data centers fell 0.6% in June 2026 and is down 7.9% year over year.

“Meanwhile, data center construction was up 7% in June and up 46% from a year ago. Contractors working on data centers continue to benefit from this momentum. According to ABC’s latest Construction Backlog Indicator, the 13% of ABC members under contract to work on data centers have significantly higher backlog (11.0 months) than the 87% that are not (8.5 months).”

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.

Associated Builders and Contractors is a national construction industry trade association established in 1950 with 67 chapters and 24,000 members. Founded on the merit shop philosophy, ABC helps members offer a robust employee value proposition, develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org. 

The post June Nonresidential Construction Spending Up on Strength of Data Centers first appeared on Construction Executive.

According to data published in the Beck Group’s latest construction cost report, nonresidential construction costs increased about 5% last year, which falls within the range of normal cost escalation. In 2026, construction cost inputs are expected to trend close to last year’s level, pending no major hiccups, such as a prolonged Middle East conflict.

Expectations of another year of stable construction costs, along with potentially lower interest rates and reduced inflationary pressures, helped buoy AEC firms’ hopes of improved business conditions later this year.   

The report lists input costs for markets in Atlanta, Austin, Dallas/Fort Worth, Denver, South and West Florida, and Raleigh. It presents construction costs for healthcare, higher education, hospitality, office, multifamily, faith-based, parking and site work.    

Tariff Impacts Overblown

Many AEC firms feared significantly higher prices for imported construction materials when the Trump administration unleashed an unprecedented flurry of global tariffs under the International Emergency Economic Powers Act and other statutes in the first quarter of 2025. The IEEPA tariffs had their greatest impact on metal products, such as aluminum, steel and copper.

But a Supreme Court decision in February ruled that the tariffs were deemed illegal. That led the administration to impose a 15% tariff increase under a different statute to replace the invalidated tariffs.   

Surging demand for data centers and mission-critical infrastructure projects contributed to higher prices for metal products. But prices for other construction materials were largely capped by slower activity in nonresidential projects.

Significant construction cost escalation failed to materialize for various reasons. That included the administration successfully negotiating lower tariffs with some countries and no new 2025 tariffs following the initial round that year.

Other contributing factors included AEC firms implementing cost-containment strategies, such as negotiating supplier deals or purchasing materials from countries with lower tariffs. Some AEC firms’ workflow models, such as Beck’s highly collaborative design-build model, also proved valuable in stabilizing project costs.

Demand for Skilled Trades Heats Up in Cooling Labor Market  

Additionally, input costs remained affected by the ongoing shortage of construction workers. That trend is exacerbated by a proliferation of data center and other large-scale construction projects, which are siphoning skilled workers from other projects by offering higher pay and other attractive incentives.  

However, overall demand for construction labor has cooled amid fewer commercial projects, particularly in the office and multifamily segments. Higher borrowing costs have made it difficult for owners and developers to pencil in these projects profitably. But steady demand exists for healthcare and educational projects, which are typically funded with public investments.      

Costs are also impacted by building codes and regulations, building designs and other factors. Those costs generally gradually rise over time and are in addition to material and labor costs.

Firms still face headwinds that could push construction costs above anticipated levels this year. More costly tariffs and other event risks could potentially lead to supply disruptions, material scarcity and higher energy costs.

Regional Cost Disparities

In the breakdown of building costs in Beck’s markets, there are significant differences across regions and industry sectors. Size, location, project type and complexity, labor wages and material prices are among the mix of factors influencing construction costs.

South Florida had the highest input costs in Beck’s operating regions. West Florida, Denver and Atlanta were also at the high end of costs, while Raleigh, Austin and Dallas/Forth Worth were on the lower end.  

The report shows significant cost differences across several building categories in Beck’s markets.

Below are examples of building costs in Beck’s markets. The building sectors listed below reflect the lowest (generally Dallas/Foth Worth) and highest (generally South Florida) construction costs in the firm’s markets. 

• Healthcare–In Beck’s seven markets, the cost of building an acute care hospital ranges from a low of between $705 to $832 per square foot to a high between $795 and $938 per square foot. Costs for a core-and-shell medical office building (without tenant improvements) range from $225 to $265 per square foot to $292 to $345 per square foot. Many industry veterans may recall that the cost to build complex healthcare facilities, such as hospitals, ranged from $500 to $600 per square foot. Those costs are now approaching $1,000 per square foot, reflecting technical requirements and long-term escalation.

• Hospitality–Construction costs for a five-star hotel range from a low of $594,392 to $701,338 per key to a high of $990,654 to $1.168 million per key. The cost of a four-star hotel ranges from $235,945 to $278,397 per key to $499,093 to $588,892 per key.
• Higher Education–Building costs for general classroom and office buildings range from a low of $403 to $476 per square foot to a high of $621 to $733 per square foot. The projects’ renovation costs range from $355 to $418 per square foot to $433 to $511 per square foot.
• Multifamily–Input costs for a rental high-rise project range from a low of $330,956 to $390,503 per square foot to a high of $623,130 to $735,246 per square foot.
• Office–Input costs for a seven-plus-story, core-and-shell office building (without interior finishes and parking facilities) range from a low of $237 to $279 per square foot to a high of between $326 and $385 per square foot. The cost of constructing office buildings is approaching $300 per square foot nationwide, up from the historically lower end of $200 per square foot. The office market has undergone structural changes since the pandemic, with many older or underutilized buildings being used or planned for residential or mixed-use projects. There is a general lack of interest in speculative, ground-up office buildings due to higher borrowing costs and concerns over their profitability in the current environment.
• Faith-Based–Worship space construction costs range from a low of $424 to $500 per square foot to a high of $659 to $778 per square foot. Renovation costs for this building type range from $189 to $223 per square foot to $231 to $272 per square foot.
• Parking–Construction costs for a precast parking structure range from $18,672 to $41,420. For an above-grade podium parking structure, the cost to build this facility ranges from $43,179 to $84,824.
• Sitework–For work on urban sites less than five acres, costs range from $1.45 million to $2.32 million. For non-urban sites between 5-15 acres, the cost ranges from $911,808 to $1.45 million; for non-urban sites larger than 15 acres, the cost ranges from $561,674 to $896,639.

Barring any unforeseen bearish events in 2026, construction cost inputs are expected to mirror cost escalation in 2025. This year also marks a period of guarded optimism among AEC firms, following a turbulent year. Beck will publish an update on nonresidential construction costs in the markets listed above later this year, providing a snapshot of how building costs are transforming a dynamic built environment.    

SEE ALSO:

The post Construction Costs Should Stabilize for 2026 Despite Persistent Global Pressures first appeared on Construction Executive.

Construction spending continues to contract, and momentum is particularly scarce outside of the data center segment. Headwinds like materials price escalation and high borrowing costs remain stiff, yet backlog and consumer confidence are both healthy heading into the second half of 2026. 

Private Nonresidential Construction Spending Continues to Slide

Construction spending in the private nonresidential segment shrank for the seventh straight month in May and is down nearly 7% over the past year. Much of that weakness is due to waning CHIPS Act incentivized megaprojects, yet there is an utter lack of momentum outside of the surging data center segment. Public nonresidential activity has held up better and rose at a healthy pace in May.

Construction Employment Grew in June

Construction industry employment added 11,000 jobs in June, all of which were in the nonresidential segment. Employment in the residential segment contracted. This growth, fueled by data centers and public construction, will likely persist over the coming months as activity in those segments continues to expand.

The industry’s unemployment rate is up 1.3 percentage points over the last year, indicating that worker availability has improved across certain occupations.

Contractor Backlog and Confidence Stable

ABC’s Construction Backlog Indicator fell to 8.8 months in June but is still above year-ago levels. That annual growth has been fueled entirely by the Middle States and South regions; backlog is down over the past 12 months in the Northeast and West. Contractor confidence, meanwhile, remains elevated, with contractors on net expecting greater sales, hiring and profit margins over the next six months.

Materials Prices Fall With Oil Prices

Construction input prices fell in June, largely due to the decline in oil prices, but remain nearly 8% higher than during the same month last year. Despite the decline, input price escalation will likely resume in the coming months due to renewed oil price pressures and ongoing increases in the price of tariff-affected inputs like iron, steel and copper.  

Looking Ahead

Surging data center activity is crowding out other forms of commercial investment. That, along with elevated materials and borrowing costs, has led to a dearth of momentum across most private nonresidential construction segments. That dynamic will remain firmly in place over the coming months, especially with oil prices once again rising and borrowing costs unlikely to decline in the near future.

Sources: U.S. Bureau of Economic Analysis; U.S. Census Bureau; U.S. Bureau of Labor Statistics, Associated Builders and Contractors.

*The Construction Backlog Indicator measures the average months of work under contract for ABC members.

**The Construction Confidence Index is a diffusion index where values above 50 indicate expectations of expansion over the next six months, while values under 50 indicate expectations of contraction.

SEE ALSO: CONSTRUCTION BACKLOG INDICATOR SLIPS, CONTRACTORS REMAIN CONFIDENT IN JUNE

The post Construction Futures: July 2026 Economic Roundup first appeared on Construction Executive.

Overall construction input prices are 7.6% higher than one year ago, while nonresidential construction input prices are 7.4% higher. Prices decreased in 2 of the 3 energy subcategories last month. Crude petroleum prices declined 12.1%, and unprocessed energy materials fell 8.1%. Natural gas prices were up 16.6% in June.

“Aggregate construction input prices receded in June due to the steep decline in oil prices that occurred throughout the month,” said ABC Chief Economist Anirban Basu. “Despite that decline, however, ongoing materials price escalation is likely over the coming months. The conflict in Iran has resumed, triggering a roughly 15% rebound in oil prices, and tariff-affected commodities like iron, steel and copper continue to experience steep price increases.

“While contractors remain optimistic about their margins, according to ABC’s Construction Confidence Index, higher input costs will likely weigh on profitability during the second half of 2026,” said Basu.

SEE ALSO: UNDERSTANDING THE TOTAL COST OF OWNERSHIP IN CONSTRUCTION FLEETS

The post Construction Materials Costs Fall With Oil Prices in June first appeared on Construction Executive.

View ABC’s Construction Backlog Indicator and Construction Confidence Index for June. View the full Construction Backlog Indicator and Construction Confidence Index data series.

Only the Middle States region experienced backlog growth on a monthly basis in June. In the Northeast region, backlog contracted sharply in June and is down by over a month from a year ago. 

ABC’s Construction Confidence Index readings for sales and staffing levels increased in June, while the reading for profit margins inched lower. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“While backlog declined in June, it’s still longer than any point from September 2023 to April 2026,” said ABC Chief Economist Anirban Basu. “This strength is the result of continued booming data center construction. The 13% of ABC members under contract to work on data centers have significantly higher backlog (11.0 months) than the 87% that are not (8.5 months). This trend is noticeable headwind for smaller contractors—just 8% of contractors with less than $100 million in annual revenues have data center work under contract, well below the 41% share of contractors with greater than $100 million in annual revenues.  

“The effect of rising input prices may be weighing on contractor profitability,” said Basu. “Contractor confidence regarding profit margins fell to a seven-month low in June, though expectations remain above the prevailing level from the second half of 2025.”

SEE ALSO: HOW CONTRACTORS ARE SHIFTING HEADCOUNT BUDGETS TO AGENT BUDGETS

The post ABC’s Construction Backlog Indicator Slips, Contractors Remain Confident in June first appeared on Construction Executive.

That gap is the whole story. The capital that builds breakthroughs is going to one place and it isn’t the jobsite. It’s the office.

For an industry that has spent a decade waiting on autonomous bricklayers and exoskeletons, this should be clarifying. If great robots were ready, contractors would be deploying them. Hardware that has to operate safely in unstructured environments, around humans, in weather, on schedule, is genuinely hard. Capital markets know this and are voting accordingly.

Meanwhile, the systems behind the field-to-finance workflow like the expense report, the pay app, the change order and the submittal are being rebuilt right now with most of that $211 billion behind them. AI agents that read, route, approve and reconcile administrative tasks are in market, deployable this quarter. Leaders waiting for the robots to arrive are waiting in the wrong room.

The Hidden Constraint on Scale

Every construction firm carries administrative load. Time tracking, expense reports, pay apps, submittal logs and change-order approvals don’t disappear thanks to AI. But across many firms, back-office process flows still rely on spreadsheets, email and on-premise file servers. Even for firms using established project management systems, many handoffs remain manual and error-prone.

As firms grow, this is not an area where efficiencies are gained. A change order that took one review when the firm ran out of a single office takes five when a second branch opens. Data gets rekeyed across the project management system, the accounting system and the field reporting tool, now in two locations, with two AP teams reconciling against each other. Senior estimators and PMs end the week having spent ten hours on tasks no client paid them to do. The default response is to hire. Add an AP clerk, add a project coordinator, add another controller. It works in the short term. But every added admin head raises G&A permanently and adds another handoff where information can stall. Overhead starts compounding faster than backlog.

Why the Math Has Changed

The common objection from controllers and operations leaders is straightforward: Can an agent really do what a senior accountant, project coordinator or estimator does today? That is the wrong question.

The right question is whether an agent can create 45 hours of capacity across a five-person team: nine hours per person, per week. Framed this way, the answer changes quickly. Capacity compounds across workflows, not job titles.

On a fully burdened basis, an office hire is a six-figure annual commitment that improves incrementally with training and tenure. An AI agent, by contrast, holds a relatively stable cost profile and improves multiple times a year as underlying models are updated. Firms that deploy agents early inherit those gains automatically, without renegotiating compensation or restructuring teams.

That framing is supported by emerging labor-market data. In March 2026, research comparing what large language models could theoretically perform across occupations with what they are actually doing in live workflows today highlighted a significant gap. One chart from this report (a radar showing theoretical versus observed AI task coverage) captures the dynamic clearly.

Office, administrative, finance and professional roles show some of the largest gaps between capability and adoption. The ceiling is already visible. Most organizations are simply operating far below it. The binding constraint is not technology; it is deployment.

For construction firms, this matters. It explains why AI is not arriving as a single moment of labor replacement, but as incremental capacity gains embedded inside existing teams. The early wins are administrative: expense routing, time reconciliation, pay applications, submittals. Firms capturing that capacity now are not eliminating roles. They are changing how much work a fixed headcount can reliably support.

The Hiring Filter

Before any open requisition becomes a job posting, it should pass through a new gate: Can the work be handled by an agent? If the answer is yes for even half the role, the remaining work can be redistributed across the existing team and the role may not need to be posted.

If the answer is no—a body is genuinely needed—the requisition still has to clear a second test. Every new hire should be accretive, not dilutive, to the firm’s AI readiness.

That sounds abstract until you measure it. A simple internal benchmark works: What percentage of the team is AI-literate (can use the tools), data-literate (can structure information for them) and AI-curious (will reach for them unprompted)? In recent survey work with one client’s accounting department, those numbers came in at 55%, 85% and 70%. That’s the baseline. Every new hire either raises the average or drags it down.

This shows up in the job description before anyone is interviewed. Hiring a senior estimator? Add “fluent with AI-assisted takeoff tools” to the requirements, not the preferences. Hiring a project coordinator? “Comfortable building and refining agent prompts” belongs above “proficient in Excel.” The wrong hire isn’t the one who can’t do AI work today, it’s the one who has no interest in learning.

Burdened, an office hire is a six-figure annual decision. It’s worth the extra week to make sure that decision compounds in the right direction.

A Strategic Shift in How Firms Scale

Contractors that have moved furthest are no longer treating automation as a one‑time initiative, but as a permanent operational discipline shaping how they scale. Deploying agents aligned to real workflows lowers long‑term cost structures while improving execution and governance.

The capital markets have already made their bet. More than $200 billion is flowing into the systems that power paperwork and office workflows, not into autonomous jobsite labor. That investment is already at work in the back office, whether contractors deploy it intentionally or keep hiring around it.

SEE ALSO: THINKING OF AI AGENTS AS MEMBERS OF A CONSTRUCTION CREW

The post How Contractors Are Shifting Headcount Budgets to Agent Budgets first appeared on Construction Executive.

POLLS

QUOTES

The AI spending boom is driving disproportionate amount of this growth. (7:56)

The wealthy have gotten wealthier and they spend a lot on services, so it’s no surprise when you break up that consumer spending contribution of growth then services will be head of the class. (25:07)

Construction had jobs at more than twice or roughly twice the rate of the balance of the country. (29:50)

One of the things we want as an industry is for more of our young people—particularly the most ambitious people—to enter the construction trades. (32:32)

I think the industry should really market this kind of statistic [speaking on the fact that those who enrolled in construction trades certificate programs earn roughly $50k more than those who didn’t enroll]. (33:57)

People love Texas [on the 2025 U-Haul Growth Index state rankings]. (36:36)

These states [top southern states in the U-Haul ranking] are associated with really dynamic metropolitan areas. (36:54)

California is exporting people like crazy. (37:47)

Architects are less busy this month than they were last month; last month was abysmal[…]and they have been getting less busy month by month by month. Design work is in retreat. (47:53)

The federal reserve said the U.S. economy will grow 2.2% this year—that’s not bad. (58:05)

This is between 20-45%, 2-3x the norm [on recession probability in 2026]. (59:08)

QUESTIONS

Questions ranged from the war in Iran’s impact on oil prices to the effects of the One Big Beautiful Bill Act one year after it was passed to what happens if data center spending wasn’t supporting the construction economy to the national debt to the state of small public works general contractors and more.

OVERALL TAKEAWAYS

Overall, Basu notes:

• Inflation poised to stage a comeback—tariffs/immigration/war
• Interest rates will be higher for longer
• Many consumers now exhausted financially and circumstances could worsen
• Are asset prices overextended?
• Forecast is for growth in 2026 but there are risks including rising interest rates and falling asset prices

SEE ALSO: ‘WE NEED TO LOWER INTEREST RATES’: ANIRBAN BASU ON 2026 Q1 CONSTRUCTION ECONOMY

The post ‘People Love Texas’: Anirban Basu Shares New Data in 2026 Mid-Year Economic Forecast first appeared on Construction Executive.

The true cost, however, is so much more than the hours spent on a losing proposal. Executives are pulled in and distracted, subject matter experts are taken away from high-impact, billable work, right-fit opportunities don’t get the time they deserve, employees get burned out with losing efforts and no data is captured systematically to improve future decision making.

The Costs Everyone Counts

The obvious cost—time spent responding—is conservatively between $3,000 to $5,000 per response for relatively straightforward proposals. With the average win rate hovering between 15%-20%, the spend per winning proposal is $33,000 at the upper end.

Many executives will see this as the cost of doing business. The hidden costs are much more impactful than purely hours spent.

Hidden Cost No. 1: Executive Distraction

An executive’s time is sparse and expensive. Every serious pursuit pulls senior leaders into pricing calls, strategy reviews, positioning decisions and final red-team sessions. When this time and attention is spent on a proposal that the company is not in a position to win, the senior leaders are kept from doing work that moves the business forward—winning right-fit proposals, nurturing client relationships and managing current projects.

A leadership team that is spending an afternoon on a long-shot bid is a leadership team that is not spending their time on the right work. Grandiose, long-shot bids may feel like ambition, yet they are often barriers to growth when pursued frequently.

Hidden Cost No. 2: Repeated Expert Work

Technical experts such as senior engineers and project managers are some of the most overcommitted and expensive people, after the executives. Most pursuits will have significant information overlap with approaches of similar, past projects.

RFPs will often ask them to answer the same questions from scratch each time. These subject matter experts are often the bottleneck. In fact, they historically and famously only respond to proposal input requests 30% of the time—leaving proposal managers and marketing directors to use boilerplate content, which directly impacts win rate.

So, the question is: Is their time best used responding to poor-fit pursuits? No, it is not. Pursuing the right work ensures less waste and perhaps better response rates.

Hidden Cost No. 3: Spreading Too Thin

Companies have a rather fixed amount of proposal response capacity. Operationally, that tends to mean that during high-volume times the quality of responses will suffer. The dependencies on executives and subject matter experts remain the same.

This is exactly the time when going after the right-fit work is absolutely imperative. Without a systematic approach to deciding which work is the right-fit work, the company will undoubtedly produce worse outputs and have worse win rates. This leads to the next issue.

Hidden Cost No. 4: Employee Burnout

Winning feels good. Losing feels bad. Losing feels even worse when there are unrealistic deadlines and expectations. Often, proposal managers and marketing directors are given an RFP and told to pursue the opportunity.

Nobody likes feeling like they are wasting their time. Most people do not appreciate working into the late hours of the night for what will undoubtedly be a wasted effort.

To protect employees’ mental health, going after work that makes sense, having realistic expectations and being consistent are all key. A recent survey showed that in construction +50% of marketing talent was considering quitting their current role. When they leave, the company loses significant institutional knowledge.

Hidden Cost No. 5: No Data Capture

How does a company know which opportunities to pursue if there is no systematic way to record the decision-making process and the results of that process? Not having a process to define which opportunities to pursue inherently means that there’s no data being captured on what worked and what did not.

Making decisions on gut feeling is not the way to promote growth of a company. It works sometimes, admittedly. However, gut feeling tends to go much further when there is data to back it up and a system that builds in consistency.

Hidden Cost No. 6: Financial Risk

Not all RFPs and opportunities were built equally. There may be significant contractual risks. There may be a single sentence that breaks your financial model. Without thoroughly reviewing a document with that particular lens, the company puts itself at risk of expending their time and people on an unprofitable project.

Having an appropriate process will help mitigate the financial risks that are otherwise often overlooked.

The Fix: A Real Go/No-Go System

A strong go/no-go process requires data, discipline and memory.

Data is crucial. Does the opportunity have significant risk? Does the RFP have clauses that are unfavorable? Is the company, at a minimum, compliant with the expectations? Are the requirements ones that the company can meet or exceed? Who is competing for this work? Can the company meaningfully differentiate itself from the competition? What is expected return on time spent responding? Is there an existing relationship with a decision maker? Without being able to answer these questions, pursuing an opportunity comes with financial risk.

Discipline is exactly as it sounds. The company needs the will to act on what the data says, even when there is open capacity and pressure to bid. A poor-fit opportunity is still a poor fit when the pipeline looks thin. Walking away is hardest when an executive is excited or a deadline is looming, yet that is exactly when discipline matters most. It also means applying the same standard to every opportunity, not just the ones nobody feels strongly about.

Memory is what makes the process compound. Every decision, the reasoning behind it and the result should be captured somewhere durable, not left in an inbox or a single person’s head. Over time, that record becomes the company’s own definition of a winnable pursuit. The next go/no-go decision starts from evidence instead of a blank page, and the knowledge stays with the company even when people leave.

None of this requires heavy bureaucracy. It requires a repeatable way to look at an opportunity honestly before committing the company’s most expensive resources to it.

The strongest firms decide well and remember what they decided. Chasing every RFP is a choice and it is rarely free.

SEE ALSO: CAN A PR AGENCY HELP CONTRACTORS WIN THE NEXT BIG RFP

The post Construction Companies Can’t Chase Every Proposal With a Weak RFP Approval Process first appeared on Construction Executive.

Spending was up on a monthly basis in 11 of the 16 nonresidential subcategories. Private nonresidential spending was down 0.3%, while public nonresidential construction spending was up 0.4% in May.

“Private nonresidential construction spending shrank for the seventh consecutive month in May and is now down 6.6% on a year-over-year basis,” said ABC Chief Economist Anirban Basu. “This weakness is largely due to the ongoing decline in manufacturing-related construction spending as CHIPS Act-supported projects wind down, yet overall there are few sources of momentum in the segment.

“Yes, the amusement and recreation category continues to grow at a healthy pace, and the religious category has rebounded meaningfully over the past year,” said Basu. “But those modestly sized segments are far too small to carry the broader nonresidential market, especially given the weakness in larger categories. For instance, warehouse construction spending, which appeared to stabilize at the start of 2026, has now fallen for three consecutive months and is down 8.5% year over year, while the general office category remains in a state of freefall, down 11.9% since May 2025.

“For now, momentum remains largely concentrated in the data center segment,” said Basu. “As seen in ABC’s most recent Construction Backlog Indicator release, those fortunate enough to have data center work have significantly longer backlogs (11.6 months) than those that do not (8.6 months).”

SEE ALSO: NONRESIDENTIAL CONSTRUCTION RETAINS HIRING MOMENTUM IN JUNE JOBS REPORT

The post Private Nonresidential Construction Spending Slides Again in May first appeared on Construction Executive.

The result is redundant data entry and lag times that leave the back office relying on financial data that’s sometimes two to three weeks old. Without timely integration between the field and the office, budget overruns are difficult to catch early, making it harder to protect profitability before the damage is done.

Construction financial management is also inherently complex because it’s not just about moving money; it’s about managing a mountain of legal defense. Manually tracking insurance certificates, safety logs and lien waivers for dozens of subcontractors is logistically challenging. A missing signature or expired policy can halt a multi-million dollar project or expose the general contractor to massive legal liability.

That’s why more contractors are turning to financial management technologies to navigate increasingly complex financial environments—shifting from reactive accounting to fully connected construction workflows that more easily improve cash flows, reduce lag time errors and align teams.

With an integrated system in place, the finance team can act as a true strategic partner to project teams, helping them not just increase profitability, but take on bigger, more complex jobs—ultimately positioning the business for sustained growth and a stronger competitive advantage.

Integrated Workflows Start from the Field

Shifting to more integrated financial workflows begins with field data, which serves as the critical link connecting what’s happening in the field with back office personnel who must then process that information in a timely manner.  This includes information like labor hours, material and equipment costs, RFIs, submittals and change orders, which are recorded daily in the field.

Within many construction companies, the “field” (project managers and foremen) and the “office” (accounting and finance) operate in disconnected silos. Field teams use project management applications and field logs to track daily progress, while accounting relies on separate financial systems to manage invoices and payments. This lack of timely data flow can create a lag, delaying the discovery of financial issues sometimes weeks after they occur.

A connected ecosystem bridges this gap by unifying field and project data with financial management via a single, shared flow of information. This ensures that both the project lead in the field and the person cutting the check in the office are working from the exact same data.

This workflow ideally starts by transferring bid data directly into a field or project management solution. A common cost-code structure acts as the connective tissue between the field and the office. As crews work, they log hours and materials and other costs against those specific cost codes. This isn’t just “status tracking;” it’s the foundation of accurate job costing.

Hours estimated versus hours spent against the budget can be more easily seen and managed. For example—if a contractor budgeted 40 hours for framing and has already spent 38 hours with half the work done, the overrun will be flagged. This allows the problem to be fixed that week, rather than finding out at the end of the month when the bank account is empty.

Field to financial integrations can also help with change orders, which are often hidden costs that aren’t noticed until the very end of a project. But when systems are linked, the change order process moves from being a paperwork headache to a proactive financial strategy.

For example, when a subcontractor encounters an onsite conflict that results in a potential change order, it’s immediately logged in the financial management system as a pending item. The system automatically calculates the potential change order’s impact on the project’s bottom line and alerts the project manager if it threatens to consume the remaining contingency. Once the owner approves the change, it’s converted into an official change order and synced with the ERP, where it automatically updates both the subcontractor’s contract and the owner’s prime contract.

The Subcontractor Relationship: Facilitating Accuracy, Speed and Trust

Another critical workflow is invoice, compliance and lien waiver management—especially for subcontractors, who are often left chasing payments through emails and phone calls. Automated payment portals like Trimble Pay act as a digital bridge between project managers and subcontractors, standardizing payments through a digitized system. It replaces tedious paperwork with a guided digital experience, shifting the dynamic from chasing checks to simply verifying progress.

Subcontractors submit invoices through a dedicated digital portal, where built-in checks ensure everything is in order before submission. If a certificate of insurance has expired or a required license is missing, the system prompts them to upload the necessary documentation on the spot. It also automatically generates the appropriate conditional lien waiver based on the invoice amount, streamlining compliance and reducing delays.

Once an invoice is submitted, subcontractors gain full visibility into the review process, including who is currently evaluating the bill—whether it’s the project manager or accounting personnel. After approval, payments are released via ACH directly through Trimble Pay.

This transparent, end-to-end process replaces the back-and-forth of phone calls and emails. Subcontractors can track their invoice status from submission to final payment, fostering greater trust and strengthening working relationships.

The Connected Future

Moving from manual, siloed operations to an integrated data ecosystem provides three major benefits to contractors:

Elimination of the Visibility Gap: By integrating field data with back-office accounting, contractors achieve more timely project and financial visibility. This allows them to catch budget overruns (such as labor hours exceeding estimates) and track pending change orders when they occur, rather than discovering financial damage after a project is already over budget.

Reduced Risk and Automated Compliance: Managing compliance and lien waivers on spreadsheets is a gamble. By integrating workflows, financial solutions automatically collect and validate documents before money moves, reducing the risk of costly claims or financial disputes. The transition to automated payment portals reduces administrative friction, fosters trust and strengthens the long-term partnership between the contractor and their trades.

Scalability Without Overhead: Integrated systems allow contractors to take on more complex projects or a greater volume of work without expanding back-office staff. The efficiency gains in payment processing alone allow the finance team to act as strategic partners to the project teams.

Shifting to a fully connected financial ecosystem transforms construction management from a reactive struggle into a proactive strategy. Bridging the gap between the field and the back office helps contractors protect their bottom line through more immediate visibility, automated compliance and stronger professional partnerships. In an industry where a single missing signature or an unrecorded change order can erase a year’s profit, these digital workflows serve as the essential foundation for building a truly scalable and profitable business.

SEE ALSO: WHEN BUILDINGS FORGET: DIGITAL DATA SILOING

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