Concrete & Masonry Contractors NAICS 238110, 238140

Feb 6, 2026 - Nonresidential Building Spending to Remain Sluggish Through 2027

• Weak nonresidential building construction activity may soften demand for architectural paints. Construction spending for nonresidential buildings is expected to remain sluggish in 2026 and 2027, according to the latest American Institute of Architects’ (AIA) Consensus Construction Forecast. Spending on nonresidential building construction is expected to rise 1% in 2026 and 2.2% in 2027. Through 2027, commercial facility growth will be led by data centers, with spending increasing 26.3% in 2026 and 16.5% in 2027. However, offices are expected to see a sharp decline in spending over the forecast period, while warehouse and retail will see weak growth this year and modest gains in 2027. Manufacturing construction spending will fall 3.9% in 2026 and drop 2.8% next year. Spending on institutional projects will grow 2.7% this year, and 2.8% in 2027, led by steady growth in the health sector, but educational, and amusement and recreation project spending will be flat.
• Contractors are entering 2026 with subdued expectations as economic uncertainty, tariffs, immigration enforcement, and persistent labor shortages weigh on confidence, even as demand for data centers and power projects remains strong. The Associated General Contractors of America’s latest outlook shows contractors are optimistic about data center growth, with 65% expecting the market to grow. Still, contractor sentiment regarding education, lodging, office, and retail construction all declined sharply compared to last year. Many firms report project delays or cancellations due to financing challenges and rising material and labor costs, and more than 80% struggle to fill both craft and salaried positions.

• North American construction and engineering spending in 2026 is expected to grow by 1% after decreasing an estimated 1% in 2025, according to FMI’s first-quarter 2026 North American Engineering and Construction Outlook. Nonresidential building construction spending in 2026 is expected to be flat after decreasing an estimated 2% in 2025. Data centers will post spending growth of 23% in 2026 amid high demand for AI, but that will be offset by weakness in other nonresidential building segments, including warehouse (spending down 5% in 2026), commercial (-4%), lodging (-2%), and education (0%). The office market remains pressured by a record-high vacancy rate of 21%, according to Moody's Analytics. Healthcare construction spending is forecast to rise 3% in 2026 amid large hospital projects in several major metros. High mortgage interest rates and affordability constraints will contribute to a 5% decline in 2026 single-family construction spending. Supply gluts in some metro areas and tepid rent growth will reduce multifamily spending by 9% in 2026.
• Demand for building design services improved slightly in December from the prior month but remained in negative territory, according to a January report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) rose to 48.5 compared to November's reading of 45.3. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries rose to 52.9 in December from 51.4 in November, and the new design contracts index rose to 47.5 from 42.7. The AIA’s Chief Economist, Kermit Baker said, "Despite the ongoing decline in billings at most architecture firms, there are a few signs of potential improvement on the horizon. The number of inquiries into future project work continues to grow, and Midwest firms saw billings increase for the fourth consecutive month in December. In general, however, overall conditions remain weak across all specializations. Multifamily residential firms faced the steepest declines, while institutional firms experienced a slightly slower pace of decline compared to earlier in the year."