Planning for construction projects pick up; Consumer confidence falls; Property service jobs won’t face tip taxes

The pace of nonresidential U.S. projects heading into planning picked up considerably in the latest monthly tracking by Dodge Construction Network, led by categories such as data centers, warehouses and hotels. The data firm said construction spending in some industries could be heading higher in the coming year after months of slowing.

Based on changes in the dollar value of projects heading into final planning after receiving government approvals — and using the year 2000 as a base of 100 — the Dodge Momentum Index posted at 301.4 for August. That marked a 7.5% increase from the prior month and a 30% rise from a year earlier, signaling increased construction spending by late 2026 or early 2027 for some high-demand industries.

“Following months of uncertainty caused by tariff concerns, owners and developers have started progressing with projects while accepting higher costs,” Sarah Martin, Dodge’s associate director of forecasting, said in a statement. “Given the persistent economic and fiscal uncertainty, volatility in planning activity will remain high.”

Dodge tracked a total of 51 nonresidential projects each valued at $100 million or more heading into planning during August. The largest commercial projects included the $500 million Big Sky data center campus in Billings, Montana and the $360 million Prologis Concorde data center in Sterling, Virginia. 

Jitters over trade policies and potential inflation effects lingered in the latest national survey by the University of Michigan, as preliminary September figures showed consumer sentiment dropping nearly three points from a month ago. Researchers reported the closely watched index at 55.4, down from 58.2 in August and well below the 70.1 for September 2024.

Based on several metrics, numbers generally reflect the percentage of respondents with favorable views of their household finances and the larger economy. “Consumers continue to note multiple vulnerabilities in the economy, with rising risks to business conditions, labor markets and inflation,” Joanne Hsu, the university’s consumer survey director, said in a statement.

While overall sentiment remains above levels of April and May, when reciprocal trade tariffs on numerous countries were first announced, Hsu said trade policy remains “highly salient” to consumers. She said about 60% of survey respondents provided unprompted comments about tariffs during interviews, little changed from August.

Respondents expect consumer inflation to reach a median annual rate of 4.8% a year from now, unchanged from the prior survey. That would be well above the 2.9% annual rate reported by the government for August. 

Certain hotel, restaurant, home repair and landscaping workers are among those whose tips won’t be taxed at the federal level under the recently passed “big beautiful bill,” according to a newly issued list of nearly 70 occupations from the Treasury Department.

The government said it will be providing further guidance on the law, which also applies to some overtime pay in those and other home service categories such as maintenance workers, plumbers and electricians. Other jobs covered include hotel and restaurant bartenders, waiters, cooks, counter workers, concierges and casino dealers, along with certain entertainment workers such as dancers, ushers, disc jockeys and digital content creators.

While the new policies could help with staffing and retention for some types of property-related work, the National Association of Home Builders said tipped jobs are relatively uncommon in the construction industry. According to the Budget Lab at Yale University, about 4 million people or about 2.5% of the U.S. workforce were employed in tipped occupations as of 2023.