Construction outlook grows cloudy
Industry reporting says construction’s economic picture is becoming uneven, with data centers and some AI‑related categories holding up while other commercial builds soften. That mixed demand creates schedule stops‑and‑starts that can destabilize crews and increase churn even without a formal downturn. (constructiondive.com)
United States construction is still growing in 2026, but much of the momentum is coming from data centers while other building categories lose steam. (constructiondive.com) Dodge Construction Network said its Dodge Momentum Index, a measure of projects entering planning that typically leads spending by 12 to 18 months, rose 1.8% in March to 250.5. Strip out data centers, and Dodge said commercial planning would be down 12.7% from March 2025 instead of up 28.5%. (construction.com) The Associated Builders and Contractors said contractor backlog rose to 8.1 months in February from 8.0 months in January, after hitting a four-year low in January. The same trade group has said recent backlog gains were fueled by data center work. (abc.org) Early-stage design work is also soft. The American Institute of Architects said its Architecture Billings Index was 49.4 in February, below the break-even mark of 50, meaning slightly more firms reported falling billings than rising billings. (aia.org) That weakness is spreading unevenly across the map and by project type. The American Institute of Architects said firms in the South were flat in February, while other regions declined, and commercial and industrial specialists were among the groups most likely to expect higher billings in the next quarter. (aia.org) The split shows up in contractor surveys too. The Associated General Contractors of America and Sage said on January 8 that contractors entered 2026 with weaker expectations for most nonresidential and multifamily segments, while data centers and power projects remained the main bright spots. (sage.com) Owners are already hesitating on new work. In the 2026 Construction Hiring and Business Outlook survey, 63% of contractors said at least one project had been canceled, delayed, or scaled back in the prior six months. (agc.org) Labor data suggests firms are slowing their moves even without broad layoffs. The Bureau of Labor Statistics said construction hires fell by 88,000 in February, while construction employment rose by 26,000 in March after showing little net change over the prior 12 months. (bls.gov 1) (bls.gov 2) That combination can leave crews stuck between bursts of work and sudden pauses. Anirban Basu, chief economist for Associated Builders and Contractors, told Construction Dive the artificial intelligence buildout will end “at some point,” but “not now,” which is keeping one slice of the market busy while the rest looks more fragile. (constructiondive.com)
