Q1 Construction Industry Report — North Central

Construction priorities are shifting due to social, economic, technological, geopolitical and policy forces. Emphasis is moving from sustainable energy to data centers and supporting infrastructure as AI and hyperscale computing rapidly expand. Although overall U.S. construction spending is declining in the near term, data center and civil construction are growing, education remains steady and industrial activity is increasingly focused on modernization. Contractors can find opportunities by adapting strategies to target resilient sectors such as civil, education and healthcare and by using data to anticipate market shifts.

Challenges

Office and Multifamily Market Shifts

Traditional office and retail projects are encountering headwinds.

Office and multifamily sectors face high vacancies as excess supply is absorbed and hybrid work reshapes demand.

New office builds focus on top-tier spaces or repositioning existing properties.

Multifamily development now emphasizes targeted investment over broad speculative builds.

Construction Constraints

Contractors continue to face labor constraints and material cost volatility.

U.S. copper mining expansion is a slow, complex process that often takes 10–20 years because of permitting, environmental and construction constraints.

Growth Areas

Denver and Kansas City

In 2026, construction activity in Denver and Kansas City is transitioning, with strong growth led by data center, industrial and infrastructure sectors. Power projects are also growing. Major public and private investments are driving momentum in both cities.

In Kansas City, the FIFA World Cup is accelerating investment in hospitality, entertainment and transportation as the city focuses on developing a more connected, walkable urban core through transit-oriented and adaptive reuse projects.

Denver's market is balancing new opportunities with a more cautious growth pace.

Public sector work is also strong due to approved education bonds and large projects like expansions at Denver International Airport.

Other Cities in the Region

In other cities, the market is shifting from high‑volume development toward higher‑quality, strategically targeted projects, particularly mixed‑use, walkable environments.

Modernization Offers Opportunities

Industrial construction is projected to reach $17 billion in 2027, indicating a shift toward efficiency improvements and modernization projects over new facility builds.