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Construction is not experiencing one industry-wide boom or bust in 2026. Demand is concentrating in data centers and power projects, while transportation, public buildings, education and several housing segments have much weaker expectations. Even firms with attractive backlogs are being squeezed by material costs, scarce labor, financing uncertainty and difficult project delivery.
The clearest evidence comes from trade-association surveys, government productivity measures and a global returns analysis. Together, they show a widening gap in market exposure and operating conditions—not a defensible ranking of individual corporate winners and losers.
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Which construction sectors are doing well in 2026?
The strongest expectations are in data-center and power work. The Associated General Contractors of America (AGC) surveyed 951 firms in 49 states and the District of Columbia from November 4 through December 15, 2025. Its net reading is the share expecting expansion minus the share expecting contraction, so it measures sentiment about 2026 rather than realized growth.
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| Market segment | 2026 AGC net reading | What the survey shows |
|---|---|---|
| Data centers | 57% | 65% expected expansion and 8% expected contraction |
| Power projects | 34% | Second-strongest expectation |
| Transportation structures | 11% | Muted expansion expectations |
| Highways and bridges | 10% | Muted expansion expectations |
| Federal work | 5% | Near-flat outlook |
| Multifamily | 4% | Near-flat outlook |
| Public buildings | 1% | Essentially flat |
| K–12 schools | -1% | Slightly more firms expected contraction than expansion |
| Higher education | -5% | Weakest listed expectation |
AGC chief executive Jeffrey Shoaf described the split this way: “While there are pockets of optimism in select private-sector markets, contractors’ overall sentiment has dampened notably compared to last year.” The full outlook and survey definitions are in AGC’s January 8, 2026 release.
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Are data centers driving a construction boom?
They are driving a concentrated boom, not a broad-based one. Data-center demand requires large, specialized projects and substantial electrical and utility work, which favors contractors able to pursue those pipelines, meet technical requirements and carry the associated delivery risk. Power projects benefit from related infrastructure demand. That growth can coexist with weak education, public-building and transportation pipelines.
ABC’s April 2026 member backlog indicator was 8.8 months. In the same release, 42% of member contractors with annual revenue above $100 million reported being under contract for data-center work. ABC said the boom had benefited its largest members “almost exclusively.” The measure is a member survey and should not be treated as a census of all contractors or as proof that size alone causes better performance. See ABC’s May 2026 backlog release.
Why are some construction companies thriving while others are struggling?
Demand is concentrated in different pipelines
A contractor tied to data centers or power has a different order book from one dependent on schools, multifamily buildings or conventional public works. Access to large projects also depends on prequalification, bonding capacity, geographic reach, specialized crews and the ability to finance mobilization. The available evidence supports comparing those exposures; it does not establish a company-by-company winners list.
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Material prices are undermining project viability
AGC’s analysis of government producer-price data found that inputs to new nonresidential construction rose 8.9% from August 2025 to August 2026. Selected year-over-year increases were substantially higher:
| Input | Increase, August 2025–August 2026 |
|---|---|
| Diesel fuel index | 77.8% |
| Liquid asphalt | 16.4% |
| Aluminum mill shapes | 27.3% |
| Steel mill products | 23.4% |
| Copper and brass mill shapes | 20.9% |
In an AGC association survey conducted in July and August 2026 with NCCER, 55% of respondents said projects had been canceled, postponed or scaled back during the preceding six months. Fixed-price contracts, long procurement windows and weak escalation clauses can leave a contractor absorbing increases that were not foreseeable at bid time. Firms with better pass-through provisions, shorter exposure periods or stronger purchasing leverage may be less vulnerable, but the survey does not quantify each firm’s losses.
AGC chief economist Ken Simonson said: “Construction firms are being squeezed by tariff- and war-induced materials cost increases, even as they boost wages to attract personnel.” His comments and the price series appear in AGC’s September 10, 2026 cost release.
Labor limits execution even when demand exists
The AGC 2026 outlook survey found that 82% of respondents had difficulty filling hourly craft positions and 80% had difficulty filling salaried openings. Sixty-three percent expected to add staff, while 15% expected a decrease. That combination indicates a capacity constraint: a firm can have profitable opportunities in its pipeline but lack the supervisors, electricians, equipment operators or other personnel needed to deliver them. These are reported expectations and hiring difficulties, not measured net employment gains.
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U.S. Bureau of Labor Statistics (BLS) data for 2025 show labor-productivity declines in each of the four construction industries for which detailed measures are currently published:
| BLS industry | 2025 productivity change |
|---|---|
| Industrial building | -12.1% |
| Multifamily residential | -7.4% |
| Single-family residential | -4.5% |
| Highway, street and bridge | -1.8% |
Those four industries represent about 12.5% of construction-sector employment, so they cannot rank the whole industry. BLS also cautions that “These measures do not include work done by subcontractors.” Output comparisons are difficult because projects vary by region, materials, quality and site conditions. The figures therefore indicate uneven execution pressure, not a complete league table of contractor productivity. BLS last modified its construction productivity highlight on September 28, 2026; it says it is exploring measures for additional subsectors. Read the methodology at BLS Construction Labor Productivity.
Low returns make risk harder to fund
McKinsey’s global comparison covering 2008–2023 found that post-tax return on invested capital for construction companies and raw-material suppliers declined 0.5 percentage points, while product suppliers’ returns rose 9.2 percentage points. This is not a U.S.-only statistic, not a contractor profit-margin measure and not evidence about 2026 results. McKinsey links the gap to features such as competitive tendering, risk-estimation errors and limited ability to capture value. The analysis is available at McKinsey’s construction productivity report.
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| Comparison axis | More favorable position | Pressure to examine |
|---|---|---|
| End-market pipeline | Data centers, power and other segments with strong order expectations | Education, public buildings, multifamily and slower transportation categories |
| Backlog and project access | Longer contracted backlog and capability to qualify for large projects | Short backlog, concentrated customers or inability to meet bonding and technical requirements |
| Material exposure | Escalation clauses, indexed pricing, early procurement or purchasing scale | Fixed-price work with long delivery periods and volatile steel, fuel or copper inputs |
| Workforce | Reliable craft and salaried staffing, training and supervisory depth | Open positions that delay starts, reduce throughput or increase overtime |
| Productivity evidence | Improvement in the relevant project type, measured with clear scope | Declines in the applicable BLS subsector or unmeasured subcontractor dependence |
| Value-chain returns | Ability to price and retain value for specialized risk | Low-margin tenders and repeated underestimation of project risk |
What the numbers do—and do not—prove
- AGC’s net readings are expectations from a defined respondent group, not construction output or revenue growth.
- ABC’s 8.8-month backlog is a dated member-survey indicator of expected work, not guaranteed cash flow.
- The 8.9% input increase is an aggregate producer-price measure; individual contracts and regions can experience different costs.
- BLS productivity covers four industries and excludes subcontractor hours, so it cannot identify every efficient or inefficient firm.
- McKinsey’s return comparison is global and historical, spanning 2008–2023; it should not be converted into a 2026 U.S. forecast.
The 2026 outlook in one sentence
Construction’s winners and losers are drifting farther apart because a narrow set of capital-intensive markets is expanding while many traditional segments remain soft, and every contractor still has to clear the same labor, cost, financing and execution hurdles. Data-center and power exposure can create opportunity, but backlog quality, contract protection, staffing and delivery discipline determine whether that opportunity becomes a sustainable return.
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