The construction economy is doing better than forecast this year. Look closer and it’s really two economies. The Associated General Contractors’ 2026 mid-year outlook shows spending and employment holding up, but the strength sits almost entirely in data centers while much of the rest of nonresidential drifts flat to negative.
What the mid-year construction outlook found
Data centers posted the strongest reading by far, with about 65% of surveyed firms expecting demand to rise and just 8% bracing for a decline. Employment kept growing into mid-year. But total nonresidential spending stayed roughly flat, because contractions in commercial and manufacturing work offset the data-center surge instead of adding to it.
The split is the story
A market that leans this hard on one segment is a fragile kind of healthy. Rising material costs, higher diesel prices, and uncertainty over federal infrastructure funding all sit on the risk side of the ledger. Contractors without a lane into data-center or power work are feeling a very different 2026 than the headline numbers suggest.
The manufacturing side of that split is visible in projects like the GlobalFoundries Malta fab expansion. AGC published the full outlook.