Planning activity ticked up again in February, boosted by data center projects, yet overall momentum slowed as institutional sectors, such as healthcare and education, pulled back. Input prices climbed for a second straight month, with nonresidential construction costs rising at a 9% annualized pace — the fastest in two years.

Meanwhile, tariff uncertainty continues to fuel volatility, prompting some developers and owners to delay projects. Backlog slipped slightly in February too, revealing a wide gap between large firms benefiting from megaprojects and smaller contractors facing fewer opportunities.

Although construction spending reached a record high in February, some economists warn it may represent a high-water mark. Hiring activity cooled in February, and reactions to the Trump administration’s tariff policies added to broader industry unease.

On a positive note, contractors posted the lowest February layoff rate on record. That’s a sign they’re holding on to workers in anticipation of a rebound later this year.

The signals are mixed. Data centers are still gathering most of the activity but uncertainty is causing growth to stagnate. But firms are holding on to their workers. Maybe a Q3, Q4 boom is ahead of us?