Construction activity is expected to stay strong heading into 2026, with data centers, manufacturing and infrastructure projects leading the way. Contractors are still dealing with high material costs, labor shortages and tariffs, but the new tax law may offer some relief to the construction industry.Â
Economic conditions are showing signs of improvement, though many construction companies are still facing higher costs and tighter margins. For reference, prices are rising at about 3% per year, much lower than the spikes in 2022, but still above the Federal Reserve’s 2% target. In this environment, the majority of forecasts expect gradual interest rate cuts throughout 2026.Â
