The construction industry is heading into 2026 with a mix of stubborn challenges and new opportunities. ForConstructionPros.com has received reports from multiple companies pointing to an industry that will confront tight labor conditions, rising material costs and uneven regional demand, even as investment grows in smarter systems, digital tools and long-term resilience.
Despite ongoing economic uncertainty, several sectors are positioned for growth, and data-driven planning is expected to shape how to approach projects in the year ahead.
Flat Spending Environment Requires Local Strategy
After a 4.7% decline in 2025, both JLL and CBiz expect construction spending to increase only 0.4% in 2026. The near-flat outlook underscores the need for localized planning, adaptive delivery methods and market-by-market analysis rather than broad national strategies.
JLL reports that policy-driven regional variation will create uneven conditions across the country, with some markets gaining momentum while others face constraints. Workforce limitations, trade policy shifts and local economic performance must all be considered in planning.
Labor Constraints Persist, Though Some Segments May Stabilize
Labor shortages remain one of the industry’s most pressing issues heading into 2026. Industry experts project continued workforce pressure, driven by an aging labor pool and ongoing immigration constraints. These shortages may intensify as project activity increases.
QBE warns that staffing gaps, cost escalation and geopolitical uncertainty are likely to increase contractor risk exposure, requiring more proactive labor and risk management.
CSP projects a different trajectory within its own markets, forecasting some stabilization in labor conditions as its operations expand. This suggests workforce pressures may vary significantly, depending on region and sector.
Costs Continue to Rise Across Materials and Systems
Material prices are expected to rise in 2026, according to several reports we've received:
- JLL and CBIZ anticipate increases as delayed trade impacts move through supply chains.
- QBE reports average tariffs of about 20%, particularly affecting steel, aluminum and copper.
- CSP expects moderate price increases in copper and security hardware.
Together, these trends point to sustained pressure on project budgets and highlight the need for early procurement and cost-focused risk planning.
Industrial and Office Sectors Show Growth Potential
Despite broader uncertainty, some areas appear positioned for growth. Industrial construction is expected to remain a major driver, supported by logistics, manufacturing upgrades and private investment. Office markets are also showing signs of renewed activity, particularly for spaces designed around technology and collaboration.
CSP projects the strongest growth in office and industrial work in 2026 and forecasts a 55% year-over-year increase based on its current backlog. Federal incentives will support additional activity in the near term, though QBE notes that long-term investment could taper as subsidies and tax credits are allocated.
Technology Adoption Accelerates Across Systems and Infrastructure
Technology will continue to play a larger role in construction in 2026. CSP reports growing demand for AI-enabled security systems, simplified audio-visual platforms and integrated low-voltage infrastructure.
DYWIDAG experts expect broader adoption of sensors, digital twins, traceability tools and automated reporting. These technologies support continuous monitoring, predictive maintenance and more accurate long-term planning. They also help improve the performance and reliability of infrastructure systems.
Sustainability and Resilience Become Linked Priorities
Infrastructure priorities are shifting toward durability, resilience and data-verified sustainability. Stakeholders increasingly expect measurable results, including verified emissions data, material traceability and lifecycle performance metrics.
Infrastructure owners are adopting tools that support continuous monitoring of aging assets — such as bridges — where cracks, corrosion or stress changes can be detected earlier. Risk-scoring models, real-time monitoring and predictive analytics are becoming more common in efforts to extend the life of structures and reduce the likelihood of unexpected shutdowns.
Sustainability and resilience are also becoming intertwined. Long-lasting assets that require fewer repairs are inherently more sustainable, and digital tools make it easier to track both environmental impact and asset health.
Outlook: Success in 2026 Requires Planning, Insight and Data
Taken together, the 2026 outlook shows an industry managing headwinds — flat spending, labor shortages and rising costs — while accelerating its shift toward smarter systems, digital tools and lifecycle-focused planning.
Success in 2026 will depend on several factors:
- Local market knowledge and tailored delivery strategies
- Proactive workforce and risk management
- Adoption of digital monitoring and predictive technologies
- Flexible procurement and early collaboration
- Long-term and performance-driven design approaches
Firms that align big-picture strategy with detailed regional insight will be best positioned to navigate uncertainty and capitalize on emerging opportunities in the year ahead.
