While growth may be muted in some sectors, others — such as data centers, aviation, and water infrastructure — are reaching new heights. The challenge for the industry will be to build an AI-empowered workforce ready to meet the demand.
The construction industry enters 2026 with a sense of cautious optimism. While commercial construction overall is forecast to grow a modest 2.6%, the outlook is far from uniform. Investment in data centers, power, water and aviation infrastructure is accelerating, though not without headwinds. In this environment, the contractors that perform best will be those who compete on certainty, not just price. The teams that collaborate early and structure contracts that effectively manage risk will find the most success.
Below are three key sectors to watch and how they will influence the construction industry in the new year.
Nothing in the built environment is expanding faster or putting more strain on infrastructure than data center construction. After increasing by more than 50% last year, data center spending is expected to grow by another 33% this year and by an additional 20% next year. Power availability is the constraint preventing data centers from expanding fast enough to meet processing demand. In 2025, U.S. data center electricity demand surged past 24 gigawatts, with projections showing a doubling by 2030 as AI and cloud workloads accelerate.
Utilities and private developers are racing to add new generation capacity, fundamentally reshaping the power market at the same time. According to the U.S. Department of Energy, grid connection wait times for large data centers have stretched to three years or more in some regions, and more than 20% of new data center projects now face delays due to limited grid capacity or slow permitting. When the local power grid can’t provide electricity fast enough, companies are developing plans to build their own power plants to supply the data center directly until the grid can catch up.
While renewable sources continue to expand, the need for reliable, on-demand power means that in 2026, most new energy capacity will likely still come from high-efficiency natural gas plants. The renewed interest in nuclear power is encouraging, but widespread adoption — both investing in existing units and developing small modular reactors — is still several years away from significant deployment.
According to the U.S. Geological Survey, nearly 30 million Americans live in areas with limited water supplies, and about 8% of the population faces high or severe water limitations. Once-skeptical cities are starting to embrace potable reuse and advanced nutrient removal. More than 600 water reuse projects are currently in planning or development nationwide, with total investment in municipal water reuse infrastructure projected to reach $47.1 billion by 2035. Potable reuse systems are expected to represent 37% of new reuse capacity, accounting for nearly $20 billion in capital expenditures.
New federal compliance deadlines for per- and polyfluoroalkyl substances (PFAS) are also driving significant investment in advanced water treatment technologies across the United States. PFAS have now been detected in the drinking water of over 9,500 sites nationwide, affecting an estimated 172 million Americans. Industry estimates project that between 4,100 and 6,700 municipal water systems will need to upgrade their facilities to meet stricter regulatory standards and protect public health. This regulatory push is reshaping project priorities and funding strategies, with billions of dollars now being directed toward PFAS mitigation in both new and existing water infrastructure.
As water infrastructure projects grow in scale and complexity, delivery models are shifting toward collaborative approaches such as progressive design-build and Construction Manager at Risk (CMAR). Navigating these projects requires extensive coordination with regulators and community stakeholders to address environmental concerns, permitting challenges, and public perception. Contractors who engage early, understand evolving regulatory landscapes, and integrate advanced treatment technologies will be best positioned to deliver solutions that meet both technical standards and community expectations in the year ahead.
Federal funding for aviation projects under the “Infrastructure Investment and Jobs Act” (IIJA) will expire in 2026, and there’s no clear indication that Congress will pass replacement legislation. Without new funding streams, airports will lean on traditional sources such as the FAA’s Airport Improvement Program, which prioritizes airside work like runways over terminal upgrades, and Passenger Facility Charges, collected from travelers. Large hub airports with strong passenger revenues — such as DEN, LAX, and SeaTac — are likely to maintain momentum, while smaller airports that benefited from IIJA set-asides may face tougher competition for grants. Public-private partnerships could become more common, following models like LAX’s Consolidated Rental Car Facility.
Accommodating rising passenger volumes remains the top priority. Denver’s airport, for example, served more than 82 million passengers last year and is advancing its “Vision 100” plan to handle 100 million by 2030. Across the country, airports are expanding terminals and modernizing baggage handling systems. Beyond capacity-driven projects, many are also investing in high-end retail and dining, upgraded restrooms, and other amenities to attract travelers and carriers. These improvements reflect a broader trend: airports are positioning themselves as destinations, balancing operational needs with passenger expectations in an increasingly competitive market.
While the growth in these key sectors should give the industry optimism as we enter a new year, these opportunities can only materialize if the construction industry solves its ongoing labor crisis. An estimated 499,000 new workers are needed in 2026, and 94% of contractors report difficulty filling open positions. In order to meet the current building demand at the pace and level of quality clients expect, AI adoption in the industry must accelerate.
According to a Q3 2025 RICS report, the construction sector is at an inflection point, with AI adoption expected to accelerate dramatically in the next 12–24 months. The shift is toward digital staff augmentation, not reduction. AI is streamlining business processes, freeing field staff to focus more on-site rather than on administrative tasks. Industry-wide, AI is improving safety protocols, reducing delays, and enhancing productivity by up to 30% in some cases. Importantly, the most successful contractors are investing in upskilling their workforce, offering mandatory training, hands-on workshops, and support resources to ensure safe and effective use of new tools.
As we look ahead to 2026, growth is accelerating in mission-critical sectors such as data centers, water infrastructure, and aviation. I believe that contractors who prioritize collaboration, technology adoption, and disciplined risk management will be best positioned to lead the industry. We are entering a pivotal year for the construction industry — one defined by rapid change, bold innovation, and unprecedented opportunity.