A Market Focused on Steady Progress
Periods of rapid growth are often followed by moments of adjustment. For the construction industry, the second quarter of 2026 appears to be one of those moments; less about slowing down and more about settling into a sustainable pace.
Rather than a uniform shift across the board, current data reflects a healthy realignment of market activity. Specialized sectors continue to drive robust investment, with data centers, infrastructure developments, healthcare, and education showing exceptional strength. For example, a surge in data center projects has successfully boosted the national construction backlog indicator to 8.8 months, providing a solid, forward-looking runway of work for commercial and industrial contractors.
This steady performance is mirrored across our geographic regions. While certain metropolitan hubs continue to experience vibrant annual cost growth, led by Honolulu at 5.93%, Phoenix at 5.30%, and Miami at 4.99%, other major cities are establishing an incredibly stable baseline, including Chicago at 1.42% and Dallas at 3.88%. In Canada, Alberta’s energy sector continues to thrive, driving major project investment and significant momentum in nonresidential construction over the last few years. Meanwhile, Ontario’s market remains resilient, bolstered by a 16% increase in public-sector spending on major infrastructure projects such as the Darlington Small Modular Reactor.
The national construction cost index rose to 288.58 this quarter, up from 285.47 in the first quarter. Escalation continues to move closer to a consistent, manageable quarterly increase of approximately 1%; a pacing that offers developers a somewhat predictable environment for budgeting and long-term capital planning compared to the volatile spikes of the past few years. However, true predictability remains relative, as nothing is completely definite given the fluid nature of current global economics, geopolitical conflicts, and shifting tariff policies.
While this consistency allows for more reliable projections, the industry continues to adapt to evolving global logistics. Current supply-side considerations are primarily centered around transportation and fuel costs rather than broader material or labor shortages. The redirection of global shipping lanes has introduced some upward pressure on energy prices and freight transit; a development that requires careful monitoring to prevent localized container delays down the road. Even with these factors, contractors across all size categories maintain an overwhelmingly positive sentiment and express high confidence in the construction industry’s outlook.
In a market defined by regional variation, project success relies on utilizing precise, hyper-local intelligence rather than broad national averages. By incorporating proactive project controls, optimizing procurement strategies early, and modeling for localized energy and transport trends, owners and developers can confidently advance their pipelines and secure budget certainty throughout the project lifecycle.
Curious about the specifics for your region? See below for hyperlinks to region-specific insights from our report.
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