Linesight Sees Resilient Path for U.S. Construction in 2026

Despite a softer 2025 the U.S. construction industry is poised for a steady rebound as mission-critical investment continues to accelerate. According to Linesight’s latest “Construction Market Insights” report, momentum across data centers transport infrastructure semiconductors and advanced manufacturing is expected to drive growth in 2026 and beyond.

Industry output is projected to have contracted by 2.7% in 2025 following 6.5% growth in 2024. Looking ahead Linesight forecasts average annual growth of 1.9% from 2026 through 2029 underscoring a resilient long-term outlook even as near-term pressures persist.

AI investment supports broader economic momentum

U.S. GDP growth is forecast at 2.0% in 2025 and 2.1% in 2026 supported by AI-driven productivity gains and fiscal stimulus. AI investment alone contributed 1.1% to GDP growth in the first half of 2025. The Bureau of Economic Analysis also reported 4.3% annualized GDP growth in the third quarter of 2025 driven by consumer spending exports and government expenditures signaling potential upside to the final 2025 outlook.

Mission-critical sectors remain strong

While tariffs and skilled labor shortages weighed on project delivery throughout 2025 demand across mission-critical sectors continued to build. Data center spending reached $3.7 billion in August 2025 up 25% year over year while energy and utilities construction grew an estimated 4.1% for the year. These sectors are expected to remain key growth engines as owners prioritize capacity resilience and long-term infrastructure.

“As mission-critical projects accelerate the organizations that plan early will be best positioned to succeed,” says Patrick Ryan EVP of the Americas at Linesight. “Power constraints labor shortages and equipment delays require proactive strategies. Early contractor engagement and a clear procurement roadmap can significantly reduce exposure to disruption.”

Labor and materials pressures continue into 2026

Construction inflation remained elevated at 3% to 4% in 2025 driven by tight labor availability subcontractor scarcity and sustained demand for mechanical and electrical packages. Linesight expects inflationary pressure to persist into 2026 with costs ranging from 4% to 5% as competition for skilled labor and specialized systems continues.

Key materials show ongoing volatility

Several core materials are expected to remain volatile as demand and trade dynamics evolve:

• Copper: Prices are estimated to have increased 5% in the fourth quarter of 2025 with continued upward pressure into early 2026 driven by manufacturing demand and global supply disruptions.
• Steel: Pricing remains volatile amid tariff impacts and shifting market conditions.
• Aluminum: Prices are firming as tariffs tighten supply and rose an estimated 2.4% in the fourth quarter of 2025.
• Cement: Costs remain elevated due to sustained infrastructure demand and environmental compliance requirements.
• Lumber: Volatile conditions persist due to supply disruptions and tariff uncertainty with prices projected to increase 2.5% in the fourth quarter of 2025.

Lead times improve but risks remain

Lead times have generally stabilized as regional sourcing expands following significant front-loading in early 2025 and suppliers increase production capacity. However trade-related risks continue to affect delivery certainty. Overseas shipping remains unpredictable and rising demand from data centers and advanced manufacturing could push sourcing back to international suppliers adding new variability.

To protect schedules Linesight advises clients to prioritize long-term supplier agreements diversified sourcing standardized specifications and data-driven forecasting.