KEY POINTS
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Total US construction starts are forecast to rise by 0.8% in 2026, supported by continued strength in Nonresidential building.
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The US Nonresidential outlook was upgraded to reflect a stronger Data Center pipeline, while Residential and Civil growth-rate outlooks were downgraded after 2025 came in stronger than expected.
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Canadian construction starts are forecast to fall 16.3% in 2026, with Residential, Nonresidential and Civil activity all expected to contract as macroeconomic headwinds continue to weigh on investment.
The U.S. Nonresidential construction forecast continues to be shaped by the rapid buildout of AI-related infrastructure, especially data centers, which is pushing nonresidential activity higher even as other parts of the market remain more measured.
In the ConstructConnect Summer 2026 Construction Starts Forecast, total US construction starts are forecast to rise by 0.8% in 2026, supported by continued strength in Nonresidential building.
First-quarter 2026 U.S. starts rose 12.6% from a year earlier, driven by gains in Nonresidential building and Civil construction (also called Heavy Engineering).
Megaprojects, defined as those valued at more than $1 billion, also continued to exert an outsized influence on the market. In the first quarter 2026, megaproject starts reached $57.7 billion, up from $21.9 billion a year earlier.
Data Centers Reshape the U.S. Outlook
The biggest revision in the latest US forecast is in Nonresidential construction. That sector was upgraded to reflect a stronger data center profile, reinforcing how concentrated large-project activity has become in the current cycle.
Beyond Data Centers, the broader outlook for the construction industry remains cautious.
The headline outlooks for Residential and Civil construction were left mostly unchanged in level terms, but both were downgraded in growth-rate terms because 2025 came in stronger than expected. In practical terms, that means the market is still large, but the year-over-year rate of expansion now looks less dramatic against a higher base.
That distinction matters for contractors and suppliers. The topline still points to activity, but more of the momentum is being carried by specific project types and a narrower set of large awards.
US Macro Backdrop Remains Supportive
The broader U.S. economy is expected to provide a modest tailwind. Real GDP is forecast to grow 2.2% in 2026, slightly faster than the 2.1% pace projected for 2025.
According to our forecast, the rebound in equity markets should partly offset pressure on consumer spending from higher gasoline prices. At the same time, the AI buildout and a turn in the inventory cycle are supporting activity.
The baseline outlook also assumes shipments through the Strait of Hormuz gradually normalize through the rest of 2026. That assumption is important because energy prices and supply-chain disruption remain key swing factors for project timing and input costs.
Canada Heads the Other Direction
Canada opened 2026 on weaker footing. Total Canadian construction starts fell 41.3% year-over-year in the first quarter.
The sharpest declines came from Nonresidential building, down 68.2%, and Civil construction, down 43.6%. Those losses more than offset a 26.5% increase in Residential building starts.
For the full year, Canadian construction starts are forecast to decline 16.3% in 2026 after rising 10.4% in 2025. Residential, Nonresidential and Civil activity are all expected to contract as persistent macroeconomic headwinds continue to dampen investment.
Civil construction is expected to post the steepest decline, falling 19.2% from a year earlier.
What It Means for the Market
The latest forecast points to two very different North American stories. In the United States, total growth remains modest, but Nonresidential construction continues to benefit from the scale and concentration of Data Center investment. In Canada, the outlook is weaker and broader based, with all major sectors expected to move lower.
For contractors, distributors and manufacturers, the takeaway is not just that U.S. growth remains intact. It is that more of the opportunity is being driven by a specific class of large, capital-intensive projects, while Canadian activity faces a more difficult year across the board.
Read the latest quarterly Construction Starts Forecast Report to get a five-year forecast of construction starts by type of structure and by state, as well as drivers influencing each building sector.
About ConstructConnect
At ConstructConnect, our software solutions provide the information construction professionals need to start every project on a solid foundation. For more than 100 years, our insights and market intelligence have empowered commercial firms, manufacturers, trade contractors, and architects to make data-driven decisions and maximize productivity.
ConstructConnect is a business unit of Roper Technologies (Nasdaq: ROP), part of the Nasdaq 100, S&P 500, and Fortune 1000.
For more information, visit constructconnect.com
