According to the latest mid-year economic update from Macrina Wilkins, Director of Market Insights at the Associated General Contractors of America (AGC), the U.S. construction industry has performed stronger than anticipated so far in 2026. Construction employment increased by 0,8% year over year, reflecting steady gains across nonresidential building activity, per the AGC update.
Data center construction increased by 28% year over year as of April, per the AGC mid-year outlook, as global demand for artificial intelligence and cloud computing continues to fuel technology-related building. Warehouse development and traditional retail construction have entered a cooling phase, while infrastructure and technology builds are expanding at a rapid pace, according to the update. AGC data also show construction employment increased in 30 states and the District of Columbia between May 2025 and May 2026.
Rising input costs are weighing on contractor margins, with diesel fuel prices up 74% year over year, according to the AGC mid-year outlook. The update also points to infrastructure funding uncertainty tied to the upcoming Surface Transportation Reauthorization Bill, noting that delays or changes to federal funding mechanisms have prompted municipalities to slow bid advertisements for public works projects in the past.