Over the past few years, Los Angeles and the greater Southern California region have seen a steady increase in terms of construction projects. That trend is something the AEC community hopes will continue, says Paul Dutmer, vice president of Southern California for the PENTA Group.
“The construction outlook for 2026 in Los Angeles looks very active with strong momentum,” he says.
There are quite a few AEC firms in the Los Angeles region with strong revenue growth, a good backlog of work and multiple project opportunities. “Owners are ready to build, with projects in various stages of planning and construction, which is great,” says Dutmer.
The positive atmosphere is expected to be strengthened by efforts to prepare for the 2028 Olympic Games.
“While few Olympic-specific projects have fully begun, momentum is building, especially through early discussion and planning,” says Dutmer.
He says projects are likely to accelerate in the hospitality space, which will accommodate the massive influx of travelers expected to flood the city to witness the world’s biggest global sporting event. Provisional structures, facilities and services will also need to be built to support visitors.
At ENR’s Los Angeles Infrastructure Forum in November, officials again touted the Twenty-Eight by ’28 initiative, which aims to complete 28 major transportation infrastructure projects before the 2028 Games. LA Metro alone has a $35 billion program of 60 projects in the works.
“As promising as this level of opportunity looks, this environment also carries risks,” warns Dutmer.
General contractors will need to carefully weigh factors such as project location and labor availability when deciding which projects to develop. In addition, the growing number of projects could strain the capacity of subcontractors. Companies will need to be smart in staffing and diligent in planning to maintain quality control and ensure contract schedules are met. “Overall, the market is healthy, but demanding,” he says.
Dutmer says PENTA posted a record year in Southern California in 2025 and has similar expectations for 2026. Statewide, PENTA reported $1.164 billion in revenue for 2024, ranking 20th in ENR West’s Top Contractors Count last year.
Dutmer notes that strong regional construction momentum is seen across a wide range of submarkets, “although each area has its own execution risks.”
He says diversification of project type is visible in higher education, healthcare, tribal game development, public works and hospitality/entertainment.
Information compiled by Dodge Data & Analytics on construction starts indicates that construction starts for the Los Angeles region this year will total more than $30 billion, up 15% from 2025. Non-residential starts are expected to lead the way with $11.8 billion in starts, but residential starts will accelerate sharply after falling back last year.
A current project of note for PENTA is the Puente Hills Regional Landfill Park in Los Angeles County, which is currently under construction in its first phase.
The project consists of transforming a former 142-hectare landfill, which was once the second largest in the country, into a sustainable park space. The works also include a new Environmental Justice Center and operations and maintenance facilities.
“We are pleased to work with LA County Public Works’ long-term master plan to redevelop the landfill into a major regional park,” says Dutmer.
The region is not immune to the industry’s problems, but its impacts have been muted so far. Tariffs, for example, have forced businesses and homeowners to adjust and budget for them. Rising costs caused by long permits or construction delays are a more current concern.
“Even a 3% to 5% increase can affect project viability, so contractors continue to factor inflation into bids and revise costs if schedules are affected,” says Dutmer. And because of Los Angeles’ notorious congestion and limited space, logistics are tougher, forcing companies to find innovative solutions.
“Deliveries, crane placement and staging all require careful planning,” he says. “This has increased the use of prefabrication, which improves efficiency, reduces safety risks and helps manage complex urban projects.”
