A recently released report from the Associated General Contractors of America (AGC) reported that construction job growth was limited in an estimated more than half of all metro areas. Their report cites that construction employment throughout 2025 remained stable in only 55 metro areas and declined in 129 metro areas. The largest construction employment losses were in the Las Vegas (-11 percent), New York City (-8 percent) and Riverside ( -7 percent). While the largest increase was in Washington (12 percent), Kansas City (9 percent) and Arlington ( 6 percent).…
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2026 Construction Outlook
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. 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…
Read MoreWhat’s limiting American construction productivity
The downward trend of productivity falling in the U.S. construction industry fell 30% between 1970 and 2024, while overall labor productivity more than doubled. A report from leading investment banking, securities, and asset and wealth management firm Goldman Sachs explains why the U.S. construction industry is trailing behind countries’ construction industries. One reason Goldman Sachs attributes to the trend is the limited gains in industry innovation. They cited that most construction materials and tools first originated in the 1950s. The industry has yet to fully take advantage of recent technologies…
Read MoreConstruction materials up 2.8% in 2025
According to a report from the Associated Builders and Contractors (ABC) construction input prices are 2.8% higher than a year ago. While input costs decreased 0.6% in December compared to the previous month, overall material prices increased. For example material prices of copper wire and cable increased 4.6% in December, reportedly up 22% year over year. This includes primary nonferrous metal prices up 62% over the past year. “Prices for commodities less exposed to tariffs, like asphalt or crushed stone, will likely remain tame in the coming months due to…
Read MoreHome improvements result in higher construction spending
Private residential construction spending was up 1.3% in October, rebounding from a 1.4% decline in September 2025, and was primarily driven by increased spending on home improvements. Despite the increase, total spending remained 1.3% lower than a year ago in response to navigating economic uncertainty, stemming from ongoing tariff concerns and elevated mortgage rates. According to the latest U.S. Census construction spending data, single-family construction spending declined 1.3% in October, consistent with the soft builder confidence reflected in the NAHB/Wells Fargo Housing Market Index (HMI). Compared to a year ago,…
Read MoreNLBMDA’s 2026 national policy agenda
The National Lumber and Building Material Dealers Association (NLBMDA) released their national policy agenda for 2026. In this they outlined their vision for housing and construction, tax and economic policy, legal reform and consumer protection, workforce policy, environment, health and safety, production supply and trade, energy and transportation. Highlights of their framework include supporting the Timber Innovation Act to advance tall wood building construction. The NLBMDA supports and wants to advance building codes that would allow for construction of wood framed buildings larger than six stories. This is supported by…
Read MoreFed’s rate cut boosts existing construction projects
Contractors are cautiously optimistic after the Federal Reserve delivered its third interest-rate cut of 2025, lowering its benchmark rate by another 25 basis points. The move reinforces a gradual easing trend that developers hope will reduce borrowing costs as 2026 approaches. Industry leaders say the cut boosts confidence and supports projects already in planning, but it is not large enough to immediately spur a wave of new nonresidential construction starts. While planning activity dipped slightly in November, it remains significantly higher than last year, suggesting continued momentum even as financing…
Read MoreSingle-Family Construction Loan Volume Rises in the Third Quarter
Single-family construction lending strengthened in the third quarter, even as the broader real estate lending environment continued to cool. Loans for 1–4 family construction rose to $91.2 billion, the first annual increase in more than two years, showing a small but meaningful uptick in residential building activity. Overall AD&C lending, however, continued its decline for the seventh consecutive quarter, dropping to $463 billion, driven mostly by reduced lending for other types of real estate development. Despite the modest improvement in single-family construction loans, lending levels remain far below historical highs…
Read MoreThe State of the Construction Economy: What to Expect in 2026
The construction industry is heading into 2026 with uncertainty, but also with growing opportunities in reconstruction, adaptive reuse and major technology-driven projects. While high mortgage rates, rising materials costs and labor shortages continue to challenge builders, activity is shifting toward redevelopment of aging buildings and creating new housing through conversions and ADUs. Economists note that trends like office-to-residential conversions and reconstruction work are becoming essential strategies as traditional residential demand softens. At the same time, long-term volatility in interest rates and tariffs continues to influence costs and delay projects, reinforcing…
Read MorePrice Cuts on New Construction as Homebuilder Sentiment Remains Low
Homebuilders are increasingly turning to price cuts and incentives as economic uncertainty continues to weigh on buyer demand. In November, 41% of builders reduced prices, the highest share in five years, while nearly two-thirds used additional incentives such as mortgage-rate buy-downs. Builder confidence remains weak, held back by high inflation, volatile mortgage rates and lingering effects of the prolonged government shutdown, which disrupted key economic data releases. Industry leaders note that even with mortgage rates easing slightly, many buyers remain hesitant due to job-market concerns and broader financial uncertainty. As…
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