Our Central region experienced an average year-over-year construction cost increase of 3.94% (below the national average of 4.41%). These cities include Austin (4.32%), Chicago (2.89%), Dallas (3.52%), Denver (4.75%), and Minneapolis (4.22%).
Construction activity across the Central Region enters 2026 with steady but uneven momentum, shaped by elevated interest rates, shifting capital availability, and strong demand in select high‑growth sectors. Data centers, energy, and infrastructure are leading growth while cyclical building sectors remain subdued.
- Austin and Dallas continue to benefit from robust population growth, corporate expansions, and a strong pipeline of technology, industrial, and data‑center projects. The continued surge in data‑center demand is particularly influential in Texas. Rising labor costs and tight subcontractor availability remain constraints, but demand fundamentals are strong.
- Chicago faces a more tempered outlook, reflecting national softness in cyclical sectors such as multifamily, lodging, and office space. However, institutional, healthcare, and infrastructure work continue to provide stability. The region’s large labor pool offers some insulation from the workforce shortages seen elsewhere, though cost pressures persist.
- Denver remains a high‑demand market supported by infrastructure investment, and a diversified economy. Industrial and energy‑adjacent projects are benefiting from national sector strength, while residential activity is moderating under high financing costs. Contractors report continued pressure from rising labor intensity and long‑term cost escalations tied to policy impacts.
- Minneapolis shows steady institutional and infrastructure activity, supported by ongoing state and regional transportation investments. While residential demand has cooled, public‑sector and utility‑related work remain reliable stabilizers. The region is also experiencing the broader national trend of uneven material cost relief—steel and lumber have eased, while insulation and specialty materials remain elevated.
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