Drywall and Insulation Contractors NAICS 238310

Feb 9, 2026 - Drywall, Insulation Spending to Be Mixed in 2026

• US construction spending on drywall and insulation materials is expected to be mixed in 2026 as the residential market continues to face headwinds, according to FMI's most recent Building Products Market Overview report. Nonresidential drywall and insulation spending are expected to grow by 3.1% and 2.6%, respectively, in 2026. However, residential drywall spending is forecast to decline by 1.5% and insulation spending will drop 1.6%. While single-family construction has improved, activity remains well below the recent pandemic peak. Residential drywall demand is being helped by remodeling activity amid the aging of the US housing stock. Combined residential and nonresidential spending on drywall is forecast to grow at a 2.5% CAGR through 2029. Over the same period, combined spending for insulation materials will have a CAGR of 2.3%.
• Construction spending for nonresidential buildings is expected to remain sluggish in 2026 and 2027, according to the American Institute of Architects’ (AIA) Consensus Construction Forecast released in January. Total spending for nonresidential building construction is expected to rise just 1% in 2026 and 2.2% in 2027. For the next two years, commercial facility growth will be led by data centers, with spending rising 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 remain relatively flat.

• Home remodeling spending growth is expected to moderate in 2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase 2.9% to $527 billion in the first quarter of 2026, compared to Q1 2025. In the second quarter of 2026, remodeling spending will trend downward to $518 billion but still be up 2.1% from Q2 2025. Spending will then moderate further to $517 billion in Q3 2026, up 2% from Q3 2025. In the fourth quarter of 2026, year-over-year spending is forecast to rise 1.6% to $522 billion. While solid remodeling permitting activity and gradually improving single-family home sales will support remodeling activity, potential headwinds include continued weakness of housing starts and elevated interest rates.
• Bathrooms were the most common type of remodeling project in 2025, according to a recent survey of residential remodelers by the National Association of Home Builders (NAHB). The NAHB asked remodelers to rank 22 types of projects on a scale of 1 to 5, where 1 = not common and 5 = very common. Bathrooms emerged as the most common project type with 73% of survey respondents ranking them either a 4 or a 5 - "common" or "very common," respectively. Kitchen remodeling was the second-highest-ranked type of project, with 69% of remodelers ranking it as common or very common. Whole-house remodeling was the third most popular project type, with 55% of those surveyed ranking it as either common or very common.