Plywood and Engineered Wood Manufacturers NAICS 3212

Jan 24, 2026 - Nonresidential Building Spending to Remain Sluggish Through 2027

• 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.
• The North American lumber market enters 2026 with early signs of improving demand but far less supply flexibility than in past cycles, creating conditions for renewed volatility, according to Resource Wise. Housing activity remained weak through most of 2025 due to high mortgage rates and affordability pressures, although confidence strengthened late in the year as rates eased and sales forecasts improved. At the same time, supply tightened sharply, with Canadian production falling amid mill closures, curtailments, and high costs. While US lumber production improved slightly in 2025, it's still dependent on imports. With domestic producers unable to quickly replace lost import volumes, even modest demand growth could strain the market, raise prices, and heighten sensitivity to seasonal shifts, weather, and policy decisions. As 2026 begins, the balance between constrained supply and a tentative demand recovery will shape conditions for producers and buyers.

• New single-family home sales fell 0.1% month-over-month but were up 18.7% year-over-year in October 2025, according to the US Census Bureau. The October new home sales data was delayed due to the 43-day government shutdown. October's total new home sales reached 737,000 units, following two previous months of gains. Some industry watchers suggest that while mortgage rates gradually inched lower throughout 2025, they are likely to remain elevated, Reuters reports. Mortgage rates closely track the benchmark 10-year Treasury yield, which is under upward pressure from the federal deficit and above-target inflation. There are emerging signals that labor-market concerns are weighing on new-home purchase demand.
• Home builder confidence in the single-family market dropped in January amid continued affordability concerns and high construction costs, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell two points to 37 in January 2026. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The high end of the single-family market is faring relatively well compared to the medium- and low-end, which are pressured by high home prices and mortgage rates. Down payments have become a particular sore spot among many potential buyers as home prices remain elevated. However, as of January 15, the average mortgage rate fell to 6.06%, marking the lowest rate in three years, according to Freddie Mac. The HMI survey also showed that 40% of builders reduced home prices in January, which marked the third consecutive month when the share of builders offering discounts was 40% or higher.