The words that sum up the state of commercial construction in 2026 are: uncertainty, higher costs and lower expectations. While there is still optimism, fewer commercial contractors are optimistic about 2026 than they were in 2025. Contractors’ highest concerns are around an economic slowdown, uncertainty around tariffs and material costs, and a skilled labor shortage.
The 2026 Construction Hiring & Business Outlook Survey was conducted by the Associated General Construction Association of America prior to the conflict in Iran. After the start of the war, there is mostly uncertainty about how it will affect inflation, funding, the effect on the economy and jobs. Even the Federal Reserve was uncertain about the future.
Our previous article on this subject provides some insight into Inflation: Under control, out of control, impacted by bombing oil-rich countries?
There are only two markets that the majority of contractors expect to increase from 2025—data centers and power projects. The growth of data centers, which also requires increased power generation, has also fueled increases in the cost of copper, and other materials.
Although most contractors anticipate an increase in their staff, a smaller percentage reported this than in the 2025 survey. Most stated that filling positions has become more difficult. Recent data indicates that there is lower turnover with companies keeping current employees and fewer employees moving to new companies. This reflects the uncertainty around the economy where many take a wait-and-see approach with both employment and spending.
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