Construction Digs into the State of the Market
Construction companies across the country are publishing new reports offering insight into the current state of the construction market. The reports examine trends such as rising material costs, labor shortages, project demand, and regional growth patterns. By sharing this data, firms aim to provide developers, investors, and policymakers with a clearer understanding of how the industry is performing and what challenges and opportunities may lie ahead. With this, we see a big shift coming for delivery methods that all contractors need to be aware of. Let’s take a closer look.
The State of the Market
Skanska recently released its Winter 2026 Construction Trends Report, which offers a look at how the industry is entering the new year after a challenging 2025 defined by cost pressures, uneven demand, and continued uncertainty. We see after growth in 2023 and 2024, persistent labor shortages, tariff uncertainty, and elevated construction costs moderated activity in 2025.
There are a few areas that are seeing greater, faster growth than others. Skanska says the standout growth drivers are data centers and large tech-related megaprojects, powered by ongoing demand for AI (artificial intelligence), cloud, and data infrastructure. The large amounts of capital these projects attract are sustaining the engineering and construction pipeline. Institutional construction—particularly healthcare, education, and public facilities—are also projected to outpace broader nonresidential activity. Softer markets include residential and cyclical commercial segments, such as retail, office, and more.
Looking to the future, Skanska suggests consensus forecasts point to slight gains in total construction spending in 2026—flat to low single-digit growth—as private investment remains cautious, and economic and policy uncertainty persist.
Of course, Skanska’s report is only one example. Many construction companies are releasing market condition reports. Another example comes from DPR Construction, which recently release its Q1 2026 Market Conditions Report. We see there is moderate optimism for the healthcare and manufacturing markets, which are expected to see steady activity and potential expansion. In contrast, sectors such as higher education and commercial office are projected to decline in 2026, reflecting shifting priorities and changing market conditions.
Delivery Shifts for Construction
This report from DPR Construction agrees with the first from Skanska that in 2025 data center projects became a major focus for the construction industry—and suggests this trend is set to continue in 2026. Perhaps this is a bit of an obvious statement, but it bears repeating and greater analysis since the projections are huge. Deloitte estimates by 2035, power demand from AI-driven data centers could increase more than thirtyfold.
The bigger story here is that this will ultimately end up changing how owners go to market. DPR Construction suggests owners are shifting from traditional cost-focused strategies to prioritizing speed to market. We are also seeing a change in how projects are planned, procured, and executed. The DPR report suggests there are some key drivers that could ultimately impact other key markets including:
- Early development of strategic partnerships that could reshape procurement processes and planning approaches. Think more agile and innovative project delivery models.
- Proactive supply chain management and prefabrication decisions will be essential to identify risks and opportunities.
- Prioritizing BIM (building information modeling) and digital twins as foundational elements for project delivery is no longer a nice-to-have; it is a must-have.
- Embracing flexibility and innovative delivery models will be key. We could finally see a faster rise of more collaborative models where risks are shared among the stakeholders.
While the DPR report didn’t come right out and say IPD (integrated project delivery), the underlying collaborative effort is apparent in the research. Here at Constructech, we have long been talking about the rise of IPD in the construction industry, and now with the need for quick delivery of data center projects at the forefront, what we learned more than 10 years ago could become applicable more today than ever before.
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