For posterity, building is during enemy logistics, and decay is before your logistics phase.
Test: Vilnius, population 14, enemy units within 12 hexes, no units on space, so two labor squads with 20 construction each for 40 total.
Turn 2 to turn 3 from 1.96 to 2.16 fort.
If decay happened first, fort would decay from 1.78 to 1.66, needing 17 construction points to reach 2.00. The remaining 23 construction points would give you a final fort level of 2.14, which 75%+ will decay to 2.10.
Instead, building happens first, costing 3 CP to go from 1.94 to 2.00, then the remaining 37 CP rounds up to 40 to give 2.20 (which I observed during Axis turn with FoW off). I only ran a few tests, but it always dropped to 2.16 after Soviet turn.
(Why do we care? Not sure, but it might be relevant at some point, especially if the reverse were actually true.)