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You forecast a housing rebound by early to mid-2026. What factors will drive that recovery, and how quickly do you expect builders to regain momentum once interest rates begin to ease? There’ s pent-up demand among both moveup and first-time buyers waiting for mortgage rates to drop below six percent. Historically, it takes two or more quarters for rate cuts to translate into lower mortgage rates that stick. We anticipate further reductions ahead, which should drive renewed momentum in housing later in 2026.
Southern states are expected to capture nearly half of all national construction spending by 2029. What’ s behind this regional strength, and how should contractors and suppliers be positioning themselves to take advantage? The South continues to lead due to strong population growth, housing demand, and employment levels. Developers are drawn by available land, business-friendly tax policies, and a longer construction season. The best way to grow is to follow growth, contractors should be rebalancing geographic capabilities and positioning themselves where demand is strongest.
Nonresidential construction is showing resilience, particularly in data centers, healthcare, and lodging. What distinguishes these sectors from others in terms of growth potential and investment appeal? Each sector has unique demand drivers. Data centers are fueled by AI and the race among tech firms to expand processing capacity at scale. Healthcare construction remains strong given its share of national GDP and the need for diverse facility types, from hospitals to outpatient centers. Lodging, while cyclical, is benefitting from rising consumer spending on travel and experiences, particularly among younger, experience-driven demographics.
Data center construction alone is projected to exceed $ 50 billion by 2029. How is this surge reshaping demand for materials, labor, and project delivery models? Data centers have highly specialized requirements; structural, thermal, and electrical that not every contractor can meet. We’ re seeing firms create dedicated teams focused solely on data center projects, following investor demand nationwide. This specialization has tightened labor availability and extended lead times for traditional projects, opening new opportunities for contractors serving adjacent sectors.
Labor shortages and cost inflation continue to pressure margins. How are contractors leveraging AI-driven bidding, off-site manufacturing, and other innovations to stay competitive? Leading contractors are using AI to identify and bid on the right projects faster, manage labor allocation, and improve conversion rates. Many are also investing in off-site manufacturing and modular assembly to improve predictability and reduce labor intensity. We’ re seeing more collaboration and partnership models across project types and regions, as firms experiment with outsourcing and self-perform strategies. In trades like electrical, HVAC, and building envelope, some contractors are capturing more value through prefabrication, bundled services, and light fabrication.
When it comes to supply chain efficiency, what trends are you seeing around value-add distribution, and how might this change relationships between manufacturers, distributors, and contractors? The professional contractor channel is being reshaped by well-capitalized players
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