Business Issues
According to AISC vice president Brian Raff, analysts expect overall non-residential construction to grow between 2 % and 3 % in 2026. manufacturing plants).
High interest rates have slowed typical construction projects, including schools and retail.
Expected rate cuts in 2026 are predicted to revive these smaller projects, narrowing the gap between small and mega construction.
Power grid constrains data centers: A critical bottleneck is emerging in the largest growth market— data centers.
The primary constraint is the power grid, as utilities in key markets have told developers they cannot guarantee new power connections for the next three to five years.
The AIA / Deltek Architectural Billing
Index is collapsing due to tight lending standards, which generally predicts slowing.
The most exciting aspects looking toward 2026 revolve around projected sector rebounds and the potential for a broader market recovery.
The projected 6 % rebound in the institutional sector and the acceleration of growth to 7 % in the commercial sector are highly positive indicators.
The expectation that potential Federal Reserve rate cuts will revive smaller projects signals a potential broadening of construction activity beyond megaprojects.
Data center construction is poised for even more expansion.
The progression of massive projects, such as the $ 10 billion Port Authority Bus Terminal replacement in New York( which requires over 100,000 tons of structural steel), highlights the continued execution of extremely large steel-intensive ventures.
The critical role and nature of current mega projects bear emphasis.
The current market relies heavily on a few massive projects. For example, year-to-date, the entire non-residential market is being held up by two sectors: manufacturing starts( up 82 %) and data center starts( up 101 %). These Goliath projects have the steel tonnage of dozens of smaller projects combined.
We must note that the Infrastructure Investment and Jobs Act( IIJA) expires on September 30, 2026.
While congressional staffers are already drafting the next multi-year bill, the industry should be focused on ensuring the new legislation provides long-term certainty for transportation funding.
General Contractors
The Associated General Contractors of America( AGC) serves some 27,000 member companies and represents all types of construction, except single-family homebuilding.
AGC senior research analyst Macrina Wilkins relates insights from recent research as well as her expectations for 2026:
Overall, the construction industry will navigate a challenging landscape in 2026.
However, the outlook, while mixed, is not altogether negative.
An AGC survey conducted at the start of the year found that contractors expected the strongest growth in data centers, water and sewer, power and transportation work.
Those categories have largely held up through 2025, and the outlook for 2026 still appears promising.
Private nonresidential has taken the greatest hit as the result of shifting monetary and foreign policy.
The uncertainty brought by unpredictable tariffs will continue to have more of an effect than their changes in material prices.
Aware that prices can change quickly, many firms are less likely to take on a project unless they are certain they have the people to take it on and that materials won’ t be delayed. Those two factors will loom large in 2026. In a recent AGC workforce survey, data pointed to several factors behind project cancellations, delays or scope reductions.
Forty-three percent cited rising costs, 31 % pointed to financing challenges, 26 % noted shifts in demand tied to policy changes and 16 % cited demand changes related to tariffs.”
Other challenges that will likely hold down growth in 2026 include a 5 % to 6 % rise in labor costs, a 2 % to 4 % rise in material costs and less available federal funds. Nevertheless, the medium-term outlook for construction, as a whole, is slightly positive.
Data centers and power construction will lead the way; however, healthcare, pharmaceutical manufacturing and public infrastructure have the possibility to also grow.
Consulting Engineer
Dearborn Companies is a civil and structural engineering firm that serves a wide range of industries.
President Michael T. Walsh offers his views on 2026:
In terms of overall construction, my perspective seems to align with that of the mainstream construction industry economists for 2026.
On average, we’ ll see low to moderate growth, with some markets exceedingly hot.
As construction engineers( means and methods experts) who serve asset owners and contractors, our perspective differs a bit from what pure design( plan and spec) engineers may perceive.
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December 2025 • www. cranehotline. com