For Hensel Phelps, this market reinforces the value of disciplined preconstruction planning, collaborative project delivery and clear-eyed market intelligence as the definitive blueprints for avoiding schedule delays across complex project environments. Success increasingly depends on reducing uncertainty before construction begins. Projects tied to essential capacity, resilience and mission-critical need to continue to move forward, but they must navigate more complex constraints. Add policy uncertainty, reflected in the FRED Economic Policy Uncertainty Index, and many owners are looking for stronger cost, schedule and funding confidence before moving forward.
Recent spikes in commercial planning activity, following months of cautious inactivity, suggest that the market may be on the verge of moderate growth in construction spending despite ongoing uncertainty. They are also looking to strengthen their insights and partnerships around emerging power-generation and cooling technologies, driving a competitive advantage as they engage with hyperscalers and data center developers. Many large E&C companies are reassessing their project portfolios to align with these new priorities, investing in capabilities to compete for mega-projects such as data centers and advanced energy facilities. Elevated costs are also affecting both ongoing and future projects—with an 88.2 % YoY increase in project abandonment activity for August 2025; this has led developers to revisit budgets and adjust financial projections.9 Industry research indicates that increased tariffs on building materials like lumber could pose additional challenges to affordability.10 Against this backdrop, E&C firms may consider focusing on four key trends when planning their growth strategies.
For projects with timing https://homeinharmonia.com/category/real-estate-construction/ flexibility, that means more re-pricing, re-scoping and re-sequencing before capital is committed. Elevated capital costs are raising hurdle rates for projects dependent on private debt or near-term refinancing. The WWIP is designed to accommodate future expansion, supporting industrial development and ensuring a resilient and expandable water and wastewater system. Beyond serving the data center, this project plays a crucial role in the campus’s future infrastructure.
Our Markets
Meanwhile, mid-market companies, which do not possess the scale or specialization to compete for large projects, are focusing on operational improvements, workforce development, and digital adoption to remain competitive. This change is driven by the explosive growth in AI and hyperscale computing, which are altering labor and resource allocation across the industry. The focus has notably shifted from sustainable energy initiatives toward data centers and the infrastructure necessary to support them. Construction priorities are undergoing a fundamental shift, driven by a dynamic mix of social, economic, technological, geopolitical, and policy developments, affecting both demand and project economics (figure 2). 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
In August 2025, commercial and institutional planning activity increased by 30% year over year.14 They are increasingly leveraging digital tools, modular construction, and strategic partnerships to manage complexity and scale. By transforming macroeconomic uncertainty into a controllable variable, these organizations can model, hedge, and ultimately leverage tariff impacts for competitive advantage as trade policies evolve. His research and thought leadership have been cited in prominent media outlets, including Bloomberg, Forbes, CNBC, and the Urban Land Institute.
What the 2026 Construction Market Outlook Means for Owners and Developers
- Meanwhile, timing-flexible projects face ongoing headwinds from capital costs, construction material cost escalation and uncertainty.
- Quarterly and annual forecasts by building type, material category, and territory, down to county level.
- FMI Corporation forecasts continued strength in water and wastewater, data centers and longer-term power construction driven by data center growth, industrial demand and electrification.
- Among specific trades, growth will be even faster, with electricians surging 9.5% and HVAC technicians up 8.1%.
In this role, she leads the applied AI strategic growth offering, helping Deloitte’s largest IP&C clients create value through the implementation of AI and data. With close to three decades of consulting experience in global finance and information technology transformation programs, Michelle Meisels leads the engineering and construction practice and helps clients integrate digital technologies with organizational and process standard practices. Talk to one of our construction market experts and see how Dodge can sharpen your forecasts and help you grow. Built on data from 677,000+ tracked firms and 700k+ projects annually 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.
The Cost Index is determined by several factors considered on a nationwide basis, including labor rates and productivity, material prices and the competitive condition of the marketplace. Turner Construction Company announced that the First Quarter 2026 Turner Building Cost Index—which measures costs in the non-residential building construction market in the United States—increased to the value of 1530. Join our team and build some of the most exciting and innovative projects around the world. “Data center, power, advanced manufacturing and life sciences investment continues to create significant opportunities, but labor availability, power constraints, equipment lead times and material costs are continuing to challenge owners and contractors. NEW YORK, NY – Skanska, a leading global construction and project development firm, has released its Summer 2026 Construction Market Trends Report, examining the forces shaping the U.S. construction market as the industry https://dallasrentapart.com/race-for-foreign.html enters the second half of the year.
BLS employment projections, wage, and other data for related occupations not shown in the following table are available on the Data for Occupations Not Covered in Detail page. The median annual wage for this group was $59,540 in May 2025, which was higher than the median annual wage for all occupations of $50,980. Overall employment in construction and extraction occupations is projected to grow faster than the average for all occupations from 2025 to 2035. Workers in these occupations use a variety of resources https://synapsewaves.com/articles/beams-design-principles-applications/ to build and repair roads, homes, and other structures.
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