What's Happening?
PCL Construction has released its 2026 Construction Industry Outlook, highlighting three key sectors expected to drive nonresidential construction spending. The report, authored by Deron Brown, President and COO of PCL's U.S. Operations, forecasts a slowdown in construction spending growth to 2.6% in 2026. The sectors identified as pivotal include data centers, water resilience, and airports. Data center construction spending surged by over 33% in 2025 and is projected to grow by another 20% in 2026, although power availability remains a challenge due to delays in electrical grid connections. Water resilience is another focus, with nearly 30 million Americans living in areas with limited water availability. Cities are increasingly adopting potable
water reuse and advanced nutrient removal, with over 600 water reuse projects in development. Investment in municipal water reuse infrastructure is expected to reach $47.1 billion by 2035. The report also notes a shift towards collaborative delivery models like Progressive Design-Build and Construction Manager at Risk.
Why It's Important?
The identification of these sectors is significant as it highlights areas where investment and development are likely to be concentrated, impacting various stakeholders in the construction industry. The growth in data center construction reflects the increasing demand for digital infrastructure, driven by the expansion of cloud services and data storage needs. The focus on water resilience addresses critical environmental and public health challenges, as water scarcity affects millions of Americans. Investment in water infrastructure not only supports sustainable urban development but also creates opportunities for innovation in water management technologies. The emphasis on airports suggests a rebound in travel and transportation sectors, potentially boosting economic activity and job creation. These developments indicate a strategic shift in construction priorities, aligning with broader economic and environmental goals.
What's Next?
As these sectors continue to develop, stakeholders in the construction industry may need to adapt to new challenges and opportunities. For data centers, addressing power availability issues will be crucial to sustaining growth. This may involve exploring alternative energy sources or improving grid infrastructure. In the water sector, the implementation of advanced treatment systems and reuse projects will require collaboration between municipalities, technology providers, and construction firms. The shift towards collaborative delivery models suggests a need for enhanced project management and risk-sharing strategies. For airports, modernization efforts may focus on improving passenger experience and operational efficiency, potentially involving new technologies and infrastructure upgrades. These trends could lead to increased regulatory scrutiny and the need for compliance with environmental and safety standards.
Beyond the Headlines
The focus on these sectors also reflects broader societal and economic trends. The emphasis on data centers underscores the digital transformation of industries and the growing importance of cybersecurity and data privacy. Water resilience initiatives highlight the intersection of environmental sustainability and urban planning, as cities seek to balance growth with resource conservation. The attention to airports signals a recovery in global mobility and the interconnectedness of economies. These developments may also influence policy decisions, as governments prioritize infrastructure investments that align with climate goals and technological advancements. The construction industry, therefore, plays a pivotal role in shaping the future landscape of urban environments and economic systems.
