Business investment in construction structures is projected to pivot from a 2025 decline in funding to modest growth (nearly +1.8%) in 2026, with AI-related data center outlays continuing to support engineering and construction work. It’s a standout performer, driven by the relentless demand for AI and it’s showing no signs of slowing for now.” These smaller facilities are being strategically located closer to consumer populations rather than concentrated in traditional data center hubs, representing a geographic diversification of the sector. Perhaps most notably, Gaus identifies a significant trend toward medium- and large-scale data centers—distinct from massive hyperscale data centers—that are “targeted towards the end user” for final computation needs.
✦ Quarterly construction activity reports across 35 U.S. metro markets ✦ Access county-level building stock data from 1970 with five-year forecasts Dodge delivers five-year demand forecasts tailored to your product, channel, and territory, giving BPMs and distributors the precision to plan production, set targets, and size their addressable market.
In megaproject markets, the pressure is sharper as data centers, semiconductor facilities and advanced manufacturing compete for the same specialty trades. Elevated capital costs are raising hurdle rates for projects dependent on private debt or near-term refinancing. For owners, navigating this split market requires robust preconstruction risk management strategies to combat construction material cost escalation and skilled labor shortages to actively mitigate uncertainty before it impacts the bottom line. In other words, the outlook is not pessimistic about demand, but it is cautious about delivery conditions and cost control. The industry also continues to struggle to attract younger workers, with fewer than 3% considering construction careers. About 66% of firms report delays tied to labor shortages, and 45% have turned down work.
- It’s a standout performer, driven by the relentless demand for AI and it’s showing no signs of slowing for now.”
- A separate report from BlackRock last month cited Labor Department forecasts that show employment in skilled trades will grow by 5.3% on average from 2024 to 2034 versus the overall rate of 3.1%.
- The labor environment that owners bidding 2027 and 2028 projects will face is already visible in today’s supply-constrained markets.
- Dodge forecasts single-family housing construction will finish 2025 down 5% to 909,000 units, followed by only marginal improvement of 0.9% to 917,000 units in 2026.
- “We are actually pulling back our forecasts of single-family housing because we don’t see as many units needed five years from now,” he says.
Costs are expected to remain elevated through 2026
Tariffs are also affecting project timelines and construction spending, squeezing smaller contractors. Against this backdrop, E&C firms may consider focusing on four key trends when planning their growth strategies. Meanwhile, digital transformation, data center expansion, and strategic mergers and acquisitions are reshaping project sourcing, financing, and delivery. Advanced manufacturing, health care, and defense activities hinted at selective growth opportunities.3 Investment in structures is projected to pivot from a 2025 decline to modest growth (nearly +1.8%) in 2026, with AI-related data center outlays continuing to support engineering and construction (E&C) work.4 His research and thought leadership have been cited in prominent media outlets, https://alabama-news.com/hotel-construction-specifics-of-the-process.html including Bloomberg, Forbes, CNBC, and the Urban Land Institute. Scott Welch is the research leader for both aerospace and defense and engineering and construction sectors in the Deloitte Research Center for Energy & Industrials.
What the 2026 Construction Market Outlook Means for Owners and Developers
Despite these advanced technologies, poor-quality data continues to frequently undermine the reliability of analytics and AI solutions,20 reducing the return on investment and limiting both operational and competitive advantage. Leading organizations are deploying technologies such as AI-driven analytics, real-time project management platforms, and connected jobsite solutions to streamline operations, enhance decision-making, and stand out in a competitive landscape. Conversely, signs of rapid economic strengthening or targeted government incentives could accelerate activity. Interest rates, inflation, and consumer sentiment will likely be closely monitored by developers of manufacturing, retail, and office properties. Projects in early planning stages could be affected by signs of evolving government policies or economic slowdown.
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Since our forecast last year, the editors at Glass Magazine have continued to watch a rapidly changing economic environment, paired with a policy environment that still remains very fluid. Despite overall softness, data center construction is booming—up 33% in 2025 and projected to grow another 20% in 2026—driven by AI demand. The U.S. construction industry faces slowing economic momentum, high interest rates, and tariff uncertainty. The aerospace and defense sector is entering a new phase of expansion, driven by advancements https://welcomelady.net/how-to-save-when-erecting-a-private-house.html in AI, digital sustainment, and increasing demand across both commercial and defense markets Looking ahead to 2026, the outlook for commercial construction activity is cautiously optimistic, with data center and energy infrastructure expansion providing continued momentum.
- Despite all this, the outlook for 2026 is largely unchanged from what we reported in January 2025—challenging for U.S. construction, with reasons for optimism in the coming year.
- ✦ Quarterly forecasts across 22+ building types and nine U.S. regions
- Unfortunately, more muted education, dormitory and transportation construction will offset growth in the other sectors.
- They are increasingly leveraging digital tools, modular construction, and strategic partnerships to manage complexity and scale.
- Quarterly and annual forecasts by building type, material category, and territory, down to county level.
Foreign-born workers constitute approximately 30% of the construction workforce nationally, according to statistics from the U.S. However, the macroeconomic environment has since deteriorated greatly thanks to rapid policy changes that have created uncertainty in the industry. Maybe it’s the American ethos of self-reliance—the sentiment that when times get hard, we respond with hard work, initiative and resilience to create opportunities and prosperity—that has https://real-apartment.com/a-little-about-the-construction-of-suburban-frame.html the leading construction industry economists responding with “silver lining” forecasts while also hinting that we may be on the brink of a recession.
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