AMERICAS
Investment in infrastructure and data centres driving up construction activity
In North America, the end of 2025 marked a significant change for the engineering and construction industry. Instead of volatility, the industry has entered a period of rebalancing. After a notable 6.5% increase in 2024, as reported by the US Census Bureau, overall construction spending in the region is expected to decline by 1% in 2025, reflecting near-term challenges in the industry.
The infrastructure sector, along with specific institutional categories, will continue to drive momentum upward. This situation creates significant opportunities for growth and investment in critical areas, such as data centres, airports, and sports and convention centres. In terms of construction planning, 2025 ended on a positive note. Projects in the fourth quarter of 2025 moved through planning phases faster than in the third quarter.
Signs of stability in materials costs
In late 2025, trends in materials costs indicated that the market was gradually finding stability following erratic fluctuations. Data from the fourth quarter pointed to slight rises in metals such as steel and copper, offset by consistent or decreasing prices in areas like framing lumber and insulation. This implies a more stable environment for construction pricing, although it remains subject to certain volatility and regional variations.
The next 12 months is expected to be a cautious period for construction materials. While metal prices may stabilise after 2025’s tariff-driven spikes, concrete, cement and aggregates could face ongoing cost pressures. The US Bureau of Labor Statistics reported that the price producer index (PPI) for construction materials increased 3.7% year over year.
Labour shortages set to continue
The construction industry in the United States is likely to face ongoing labour challenges, which have been aggravated by recent immigration policies enacted by the White House. Data from the US Census Bureau shows that approximately 34% of the construction workforce consists of foreign-born individuals.
According to the Associated General Contractors of America (AGC), most construction firms are poised to expand their workforce in 2026. They are ready to seize this opportunity, but their success will depend on their ability to attract enough qualified workers, especially in the face of continued labour shortages. The AGC also reported that construction labour costs increased by 4.5% in 2025 compared to the previous year. Additionally, Associated Builders and Contractors projected that the construction industry must attract approximately 349,000 new workers in 2026 to fulfil the demand for construction services.
Strong growth projected for sector
In 2026, the industry is anticipated to benefit from reduced interest rates, increased private equity investment, and the impacts of data centre construction. Construction is projected to experience considerable growth, primarily driven by the demand for civil engineering initiatives and the construction of non-residential buildings. A notable shift is occurring from traditional commercial projects towards the development of data centres and clean energy infrastructure. This transition is influenced by the increasing reliance on artificial intelligence, heightened computing requirements, and favorable federal regulatory measures, all of which are propelling this evolution in the sector.
Residential construction is still in the process of recovering from the effects of high interest rates in 2023 and 2024. As borrowing costs begin to decrease, housing demand is expected to gradually increase. The improvement in housing affordability, supported by rising incomes and falling mortgage rates, is projected to drive a 9.7% increase in residential construction activity by 2026. Overall, construction output is forecast to rise by 7% in 2026.
“Construction is projected to experience considerable growth, primarily driven by the demand for civil engineering initiatives and the construction of non-residential buildings.”
RLB © 2026 Rider Levett Bucknall.