Growth in construction activity is expected to continue through 2026, but ongoing concerns remain, Anirban Basu, chief economist at Associated Builders and Contractors, said in a forecast webinar on April 8.
Continued investments in data center construction and artificial intelligence by “hyperscale” companies like Amazon, Meta and others continue to drive much of today’s growth as hiring and activity across the industry soften.
“Job offers are no longer available, [material] prices keep going up [and] people are struggling to meet basic obligations,” Basu said, adding that while Silicon Valley and Wall Street will be fine, “Main Street [will be] a little rocky.”
While total job openings have fallen, Basu noted that construction openings were expected to increase due to changes in immigration policy, as about 25 percent of construction workers are foreign-born, but the increase had not materialized. “I had expected … a bit of an increase … as more employers look to hire Indigenous workers or [documented workers] but we haven’t seen that,” he said.
Material price pressures continue
Tariffs and inflation continue to drive up material prices. Between February 2020, the month before the COVID-19 pandemic, and February 2026, total construction input prices increased 45.3%, according to the US Bureau of Labor Statistics. Gas prices rose 157% in that time, while non-ferrous wire and cable and steel products also saw substantial increases, at rates of 82.8% and 73.4%, respectively. “I don’t think it’s a coincidence that many of the categories that have experienced the biggest price increases [are subject to] tariffs,” said Basu.
Total non-residential construction spending fell 0.1% between January 2025 and January 2026, with manufacturing experiencing the largest decline, at 15%. Residential construction also declined as millennials continue to be priced out of the single-family market, Basu notes. “People talk about the housing affordability crisis [but] We’re not actually solving the problem.”
“I think it’s enough to keep the economy afloat,” he added, but maintains that there is still a “real risk” of recession in this volatile market today.
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