ENR’s construction industry confidence index rose slightly between the fourth quarter of 2025 and the first quarter of 2026, two points to a rating of 54. The index has been rising slowly and steadily since the second quarter of 2025, seven points since that reading. The ENR economic index remained stable at a slightly pessimistic score of 48.
The confidence index measures executive sentiment about where the current market will be in the next three to six months and over a 12- to 18-month period, on a scale of 0 to 100. A rating above 50 shows a growing market. The measure is based on responses from US executives at major general contractors, subcontractors and design firms on ENR’s top lists to surveys sent between February 9 and March 16.
Confidence in the current market and the market 3-6 months ahead remains strong, but executives report more pessimism about the market 12-18 months ahead. Last quarter, 53.5% of respondents saw the market improving in 12-18 months. This quarter this percentage has dropped to 44%. The percentage of companies expecting economic improvement in the next 12-18 months also fell, to 33.3% from 44.7%.
Design firms remain more pessimistic than GC/CM or subcontractors. Designer confidence came in at a score of 41, down three points from last quarter, with 43% of design firms seeing a declining market in the next 3-6 months. GC/CMs rose eight points to 55. Subcontractors remain the most trusted, with a score of 58.
Larger and smaller firms reported significantly different levels of confidence in the market. Trust among companies reporting $250 million or more in revenue was 61. Companies reporting less than $50 million in revenue came in at 43.
ENR’s results are largely reflected in the Construction Financial Management Association’s (CFMA) Confindex survey in Princeton, NJ. Each quarter, CFMA consults CFOs of general and civil contractors and subcontractors about markets and business conditions. The resulting Confindex is based on four separate financial and market components, each rated on a scale of 1 to 200. A rating of 100 indicates a stable market; higher ratings indicate market growth.
The global Confindex rose four points to a rating of 110. The business conditions index rose eight points to 113 and the current confidence index rose seven points to 104. The financial conditions index and the outlook for the year remained broadly flat at 108 and 118, respectively. All indices are down compared to the first quarter of 2025, except for the terms of trade index, which is unchanged.
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CFMA CEO Neil Shah sees a still growing but potentially fragile construction market. “We’re not diversified into asset classes from a construction standpoint,” he says. Apart from data centers and energy projects, most of the construction sectors are “not in good shape”, he explains. “And from a federal perspective, I don’t see where the money is coming from to reauthorize more infrastructure spending when we’re spending on so many other things, including a war in the Middle East.”
CFMA advisor and Sage Policy Group CEO Anirban Basu agrees: “In my view, the critical aspect to 2026 has been to lower interest rates so that the types of projects that are sensitive to interest rates can move forward. Those projects are still on the sidelines in many cases.” Basu echoes the sentiment about the U.S. economy as a whole: “When you have such a narrow base, the entire U.S. macro economy can falter, and that’s why there’s so much concern. Costs continue to rise. Interest rates remain high, and the economic expansion is shrinking to include an ever-smaller constellation of economic players,” he says.
“At the start of the year, the expectation had been two or three rate cuts in 2026, which would have reduced the upper bound on the federal funds rate to around 3%,” he says. “Instead, what we’re getting is that 10-year Treasury yields are rising.” Sage’s chief executive expects a rate cut this year at the latest.
Still, Basu doesn’t foresee a recession in 2026 as the data center boom shows no signs of abating. “You see Mark Zuckerberg announcing layoffs on the one hand and spending more than expected on AI infrastructure on the other. The commitment to spend on AI infrastructure is increasing, not decreasing,” he says.
Those companies hoping for more public dollars to flow into the construction sector are likely to be disappointed, Basu says. “Government finances at the state level have really deteriorated in the last year or two. Last year, for example, you had debt relief in Chicago, Los Angeles. [and other places]. You just don’t have that much state money.” The federal government has shown no sign of authorizing a new public works package. “We had a $1.2 trillion package, [with] $550 billion new with Biden. The Trump administration talked about $20 billion and the rest from public-private partnerships. Who knows if it works or not?” says Basu.
Basu has been advising those heavy civil and public works contractors to sell their business early if they want to maximize their value. “Your finances are great right now, but in four or five years, I think the money is gone,” he explains. “[In a few years] the Social Security trust fund becomes insolvent; The Medicare trust fund is insolvent; and you won’t look that good on paper or in reality. I have yet to have a contractor say, “You’re dead wrong about that.”
