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 the need for firms to manage workforce pressures and rising material prices carefully.
Despite weaknesses in several core sectors, data centers and megaprojects drove much of the industry’s growth in 2025 and are expected to remain strong in 2026. The relentless demand for AI and cloud computing has made data centers one of the most resilient construction categories, with record-breaking project starts and billions in planned development. Megaprojects—projects exceeding $1 billion—also surged, lifting nonresidential construction even as other markets cooled. Looking ahead, experts say firms must prioritize strict cost control, strategic bidding and close monitoring of borrowing costs and trade policies to succeed in an uneven market. While challenges persist, opportunities in reconstruction and major tech infrastructure provide a promising path forward.
