2026 Key Insights for Construction Leaders
Published on by Jessica Doremus in Construction
- Industry confidence and demand are rising, with improving sentiment and strong 2026 project pipelines.
- Backlogs remain a key strength, as nearly 90% of firms have over a year of work secured and 71% report continued growth.
- Capacity constraints are driving hiring, with most firms operating near full capacity and 67% planning to expand their workforce.
- Labor shortages remain the top challenge, limiting growth opportunities and making workforce strategy a critical priority.
- Long-term talent development is essential, with clear career pathways and targeted recruitment playing a key role in sustaining momentum.
For construction and real estate professionals, staying ahead of industry trends is key to making informed business decisions. The Construction Industry Round Table (CIRT) Sentiment Index offers a quarterly snapshot of the construction sector, capturing insights from leaders across design, construction, workforce, and economic conditions.
The latest Q1 results point to steady momentum for 2026, with growing confidence across many areas of the industry. At the same time, workforce constraints and cost pressures continue to shape how firms plan for the future.
Sentiment and economic confidence are rising
The CIRT Sentiment Index increased to 66.1, up from 64.6, while the Design Index rose to 72.0 from 68.3. Together, these indicators suggest stable demand and strengthening expectations for future project pipelines.
Confidence in the broader economy also improved, with U.S. sentiment climbing to 53.3 from 47.0 and regional sentiment rising to 66.2 from 57.0. Leaders were slightly more measured in their outlook on their own businesses, with sentiment at 69.2 compared to 73.7 last quarter. This reflects a thoughtful approach to pricing, risk, and project selection rather than underlying concern.
Backlogs remain strong
Work pipelines continue to provide a solid foundation for the year ahead. Nearly 9 in 10 firms report having more than a year of work secured heading into 2026. 54% have between 12 and 18 months of backlog, while 34% report 19 months or more.
Momentum is also building. 71% of respondents say their backlogs have increased since the end of last year, and two-thirds expect that growth to continue into the next quarter. For many firms, demand remains a clear strength.
Capacity and hiring are expanding
With demand holding steady, many firms are operating near full capacity. About 70% report operating between 81% and 100% capacity, leaving limited room to take on additional work without expanding their teams.
Hiring plans reflect that reality. 67% of firms expect to increase hiring in 2026 compared to 2025. While cost pressures have eased slightly, they remain elevated, making efficiency a priority. Encouragingly, productivity improved to 54.4 from 47.0, indicating that firms are finding ways to operate more effectively and protect margins.
Workforce remains the top challenge
Labor is still the industry’s defining issue. When asked to identify their biggest challenge in 2026, 37% of respondents cited the limited supply of skilled and craft workers. This far outweighs concerns about economic slowdown (12%) and increasing competition (9%).
For many firms, the ability to grow is tied directly to the availability of talent. Strategic workforce planning, retention efforts, and long-term investment in people will play a critical role in sustaining momentum.
Attracting and retaining women in construction
This quarter’s survey also explored how firms can strengthen their talent pipelines by recruiting and retaining more women. Respondents pointed to visible female leadership (77%) and early outreach through schools and universities (63%) as the most effective recruitment strategies.
Challenges remain, including industry perception, limited awareness of career paths, and work-life balance expectations. On the retention side, 67% of firms identified clear career pathways and advancement opportunities as the most impactful factor.
Across both recruitment and retention, one theme stood out: clearly defined career paths tied to training and advancement are essential for attracting and keeping talent.
What does this mean for your construction company business?
The Q1 CIRT results reflect an industry with strong demand and growing confidence, supported by healthy backlogs and improving productivity. At the same time, workforce availability and cost pressures continue to shape decision making.
For construction leaders, the priorities are clear. Focus on maintaining backlog strength, invest in your workforce, and take a long-term approach to talent development. Firms that align their strategy around these areas will be better positioned to navigate challenges and capitalize on opportunities ahead.
Next steps
With strong demand and ongoing workforce challenges shaping the industry, now is the time to bring clarity to your financial and operational strategy. Our construction team is here to help you strengthen performance, improve cash flow, and plan with confidence for what’s ahead.
Contact us today to schedule a free consultation and discuss how your current approach aligns with your goals for 2026 and beyond. As always, we’re here to help.
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