AGC survey reveals 'dampened' expectations

A survey conducted by the Arlington, Virginia-based Associated General Contractors of America (AGC) has determined that construction contractors in the United States have “dampened” expectations for 2026, aside from surging demand for data centers and power facilities.

The 2026 Construction Hiring and Business Outlook survey, conducted in cooperation with global consulting firm Sage Group plc, found some contractors expressing concern about the direction of the economy, reporting they have been affected by tariffs, materials costs, enhanced immigration enforcement and challenges finding qualified workers.

“While there are pockets of optimism in select private sector markets, contractors’ overall sentiment has dampened notably compared to last year,” AGC CEO Jeffrey Shoaf says.

The survey measures contractors’ expectations for different market segments via a net reading—the percentage of respondents who expect the available dollar value of projects to expand compared to the percentage who expect it to shrink.

The highest net reading, 57 percent, for 2026 is for data centers and contractors remain bullish about power projects as well, which recorded a net reading of 34 percent. AGC members are moderately optimistic about hospitals, other health care facilities, water and sewer, and the manufacturing construction sectors.

However, the net reading for construction of transportation structures, such as airport and rail projects, plunged from 29 percent to 11 percent during the past 12 months. The reading for bridge and highway construction dropped 14 percentage points to 10 percent.

Actions by the current presidential administration could tie into mixed findings about infrastructure projects and others tied directly to government spending.

“Expectations for contracts for federal agencies such as the General Services Administration, Department of Veterans Affairs, U.S. Army Corps of Engineers and the Naval Facilities and Engineering Command fell from 22 percent to 5 percent,” AGC says.

Ratings for school construction fell below zero, while the net positive rating for the multifamily residential sector slid from 12 percent in last year’s survey to 4 percent in the latest survey.

In addition to lowered expectations, many contractors report being affected by new tariffs and enhanced immigration enforcement. Roughly 70 percent of firms report being affected by tariffs this year, with 40 percent of those respondents saying they raised bid prices because of increased materials costs.

One-third of firms (33 percent) report having been affected by immigration enforcement actions in the past six months, with 6 percent reporting a jobsite or nearby offsite area having been visited by immigration agents.

In perhaps the most alarming statistic for demolition contractors and C&D materials recyclers, more than 60 percent of respondents said a property owner had postponed or canceled a project in the past six months.

Despite their expressed concerns, most firms responding to the survey anticipate adding workers in 2026 to meet the needs of current and planned projects. According to the survey, more than three-fifths (63 percent) of firms expect to add to their headcount compared with only 15 percent who expect a decrease.

The association says one of its top priorities in 2026 will be to urge Congress to pass a new surface transportation bill before the current one expires in September.

AGC says it also will continue to urge the Trump administration and Congress to address workforce shortages through expanded lawful, temporary work visa programs for construction and increased investment in workforce development.

“With supportive infrastructure funding, workforce, trade and permitting policies in place, construction can continue to grow the economy, deliver essential projects and expand access to high-paying career opportunities,” Shoaf says.

The 2026 Construction Hiring and Business Outlook survey was conducted from Nov. 4 to Dec. 15, 2025, and drew more than 950 responses from construction firms in 49 states and the District of Columbia.