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The 2026 Construction Market: What the U.S. and Canada Can Expect — technologies, residential growth, and prices

The construction sector is turning a new page heading into 2026. After a bumpy 2023–2025 period—marked by high input costs, slowing starts, and tight labor—the picture for next year looks like cautious recovery in places, continued pressure in others, and a rapid push to adopt technologies that cut time and cost. Below I walk through the outlook for the U.S. and Canada, highlight the technologies reshaping the jobsite, and explain what builders, developers, and clients should watch with respect to residential development and construction prices.


U.S. 2026 Construction Market outlook: cautious growth, selective strength

Most U.S. forecasters expect only modest growth in overall construction spending through 2026. Consensus panels (including AIA forecasts) show spending gains but at a slower pace than in earlier stimulus-driven years—certain sectors (institutional, infrastructure) will outperform while commercial and single-family may remain muted until financing conditions ease. (The American Institute of Architects)

Key things to watch in the U.S.:

A U.S. flag waves from a crane against a cloudy sky. The crane's yellow structure stands tall, creating a striking contrast.

  • Infrastructure and public projects supported by earlier stimulus packages and state-level programs should continue to provide backbone demand.

  • Commercial office and some retail projects will remain cautious as occupier demand morphs; multifamily and life-sciences/data-center construction pockets remain stronger.

  • Regional divergence: Southeast and Sunbelt markets (where permitting and population growth remain more favorable) are likely to see relatively stronger activity. (The American Institute of Architects, McKinley Building Corporation)


Canada 2026 Construction Market outlook: mixed, with a gradual recovery expected

Canada enters 2026 with mixed signals. Housing starts and resale activity were pressured in 2024–2025, but official Canadian housing agencies and many economists expect a gradual recovery beginning in 2026 as trade frictions ease and economic confidence improves. Large public and private projects (energy, transit, institutional) will keep overall construction demand elevated, even if residential is uneven across provinces. (cmhc-schl.gc.ca, ConstructConnect)

Regional notes for Canada:

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  • Ontario and British Columbia will remain focal points (but also vulnerable to price corrections).

  • The Prairies and some mid-sized markets may outperform on affordability and development pipelines. (True North Mortgage, canadianmortgagetrends.com)


Residential development growth — what type of housing will lead in 2026?

Expect a differentiated residential picture in both countries:

Aerial view of a complex of interlocking white buildings with green rooftops, surrounded by lush trees. Blue tennis court visible. Bright day.

  • Single-family: After pullbacks in 2024–2025, many forecasters expect a modest rebound in 2026 in areas where mortgage/credit conditions and consumer confidence improve. Builders are cautious — land and labor constraints will temper how fast single-family production ramps up. (The Close)

  • Multifamily: Stronger in many urban cores (rental demand, immigration-driven needs, and developers chasing density). In Canada, multifamily may lead the early recovery in larger metros. (cmhc-schl.gc.ca, canadianmortgagetrends.com)

  • Affordable and modular housing: Governments and non-profit developers are increasing interest in faster, repeatable building methods (modular, volumetric construction) to speed delivery and control costs. Expect policy-driven pilot programs and larger modular deployments in 2026. (Gould Construction Institute)


Construction prices and materials: persistent pressure, spot volatility

Input prices remain a central constraint. Through 2025 the industry saw notable increases in key inputs (lumber, copper, steel, aggregates) and in some months input indices rose materially; tariffs, trade frictions, and supply-chain bottlenecks have driven volatility. Those pressures are unlikely to vanish overnight and will shape bidding and contingency strategies in the 2026 Construction Market. (Construction Dive, Skanska Interactive)

Practical implications:

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  • Bid strategy: Contractors will continue to use shorter bid windows, higher contingencies, and more aggressive price escalations clauses where possible.

  • Substitution & design: Designers and owners will increasingly evaluate alternative materials or design adjustments to manage exposure to copper/steel/lumber swings.

  • Tariffs & policy risk: Trade policy changes (tariffs on copper/steel or changes to cross-border lumber flows) can create sudden cost jumps—monitor announcements closely. (Skanska Interactive, Investors)



Labor: the supply squeeze remains a top structural risk

The U.S. construction industry continues to face a labor gap; industry groups estimate the need to attract hundreds of thousands of new entrants to meet growing demand in the coming years. A similar challenge affects Canada, where skilled trades shortages and an aging workforce make recruitment and retention critical. These shortages will keep upward pressure on wages and incentivize productivity-boosting tech adoption. (ABC, Nationwide News)


Technologies reshaping the 2026 jobsite

2026 will be the year where practical adoption (not just pilots) of several technologies becomes widespread:

  1. Modular & offsite construction — faster cycles, better quality control, and lower on-site labor needs make modular attractive for affordable housing and repeatable product types. Expect more factory-built multifamily and rapid-response housing projects. (Gould Construction Institute)

  2. BIM / Digital twin / VDC — virtual design and construction tools continue to spread across project lifecycles, improving coordination, clash detection, and lifecycle O&M handover.

  3. AI and machine learning — estimating, scheduling, safety monitoring, predictive maintenance, and even automated design iteration are accelerating. AI-assisted planning reduces errors and compresses preconstruction timelines. (TechRadar, Exploding Topics)

  4. Robotics, automation & 3D printing — from bricklaying robots to large-format concrete printing for foundations and structural members; these technologies are moving from demonstrations to selective production use, especially where labor is scarce or speed is essential. (TechRadar, Gould Construction Institute)

  5. Sustainability & electrification tech — net-zero designs, mass timber (where permitted), high-performance envelopes, and electrified HVAC/heat-pump systems will be more common as code updates and corporate ESG goals pressure the industry to decarbonize.


How developers and contractors should prepare for 2026

  • Harden procurement plans: Longer lead items (HVAC, specialized steel) need early ordering; use index-linked contracts or escalation clauses where appropriate. (Construction Dive)

  • Invest in productivity tech: Modular partnerships, BIM maturity, and field automation will pay off by cutting schedule risk and reducing reliance on scarce trades. (Gould Construction Institute, Exploding Topics)

  • Workforce strategy: Upskilling, apprenticeship programs, and flexible crew models will be competitive advantages. (ABC)

  • Scenario financial planning: Run upside/downside cost scenarios (material shocks, interest rate shifts, permit delays) and bake contingencies into pro formas.


Bottom line

Child in hard hat and goggles, wearing a safety vest, holds a hammer in a gloved hand. Background is a brown wooden wall.

2026 looks like a year of selective recovery and structural change. Growth will be uneven—public infrastructure and certain commercial segments should perform well, while single-family recovery depends on financing and local fundamentals. Across North America, elevated input-price volatility and labor shortages will keep margins and schedules under pressure, but accelerating adoption of modular construction, BIM/digital twins, AI, and automation can meaningfully reduce schedule risk and shrink labor dependency. Savvy players who lock supply, adopt scalable offsite approaches, and invest in workforce and digital productivity will be best positioned to convert 2026’s cautious tailwinds into profitable growth. (The American Institute of Architects, cmhc-schl.gc.ca, Construction Dive, Gould Construction Institute, ABC)


Sources & further reading (key references)


  • AIA Consensus Construction Forecast (midyear update; spending outlook & 2026 expectations). (The American Institute of Architects)

  • CMHC — Summer 2025 Housing Market Outlook (Canada recovery expectations into 2026). (cmhc-schl.gc.ca)

  • Construction Dive — construction input price trends and recent monthly increases. (Construction Dive)

  • Modular construction market outlook & adoption signals. (Gould Construction Institute)

  • Associated Builders & Contractors (ABC) — workforce attraction/shortage estimates for 2025–2026. (ABC)


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