While construction’s latest economic data showed higher backlog and starts numbers, the primary driver of that growth has been data center projects. Those projects raged on despite higher input prices.

But planning activity mostly slipped for other builds and hiring among construction firms slowed to start the year too.

From those results, a consensus has emerged: Take away the artificial intelligence buildout, and construction’s economic outlook appears weaker. That’s the view from economists summing up the sector’s prospects with one quarter of 2026 in the rear view.

What We Learned in March: Industry Outlook Darkens in Early 2026

Materials price escalation resurfaced and the industry lost jobs in February, while private nonresidential construction spending continued its slow but steady decline to start the year. The fact that industry momentum was waning before the conflict in Iran sent oil prices and economic uncertainty surging is particularly concerning.

Americans and their water have something in common: they both rely on infrastructure to get from Point A to Point B.

In 2023, infrastructure supporting transportation and water received $626 billion in funding from federal, state, and local governments, over three times more than 1956 spending levels (adjusted for inflation).

The construction industry had 231,000 job openings on the last day of January, according to an Associated Builders and Contractors analysis of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings decreased by 14,000 in January and are down by 1,000 from the same time last year.