Forecast

Forecasting Local 2026 Construction Costs

This map reflects local USA Building Project Planning Services team leaders’ opinions of market volume and capacity and is not based on published analytics or third-party forecasts.

See a summary of our market sector performance and local cost escalation forecast below.

Market sector summary

Local cost escalation summary

Seattle, WA

Portland, OR

San Francisco, CA

Phoenix, AZ

Dallas, TX

San Antonio, TX

Houston, TX

Cincinnati, OH

Nashville, TN

North Carolina/Virginia

Atlanta, GA

Orlando, FL

Tampa, FL

Miami, FL

Washington, D.C.

Philadelphia, PA

New Jersey

New York, NY

New England

Select a Location

Greater Boston Growth Continues as Spending Remains Measured

The Greater Boston market is seeing moderate growth led by life sciences, healthcare, tech and AI, and public infrastructure, but capital deployment is more cautious. Significant pools of capital remain on the sidelines because of high interest rates, and political discord is increasing timing and entitlement risk. We have begun to see projects moving through the local permitting process.

Higher education project activity is muted due to NIH/grant uncertainty and institutions prioritizing deferred maintenance over new builds. Meanwhile, K-12 remains a reliable public pipeline, but some districts face difficulty passing overrides, increasing risk and elongating timelines.

Life sciences are showing early recovery signs, with larger RFPs appearing and competition amongst local firms actively pursuing acquisitions.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Boston's market position and forecast?

Matt Impastato

Vice President of Preconstruction

Joe Devlin

Senior Vice President, Business Development

Seattle, WA

Cost Escalation Impacts Budgets and Project Viability

The region's long-term fundamentals remain strong, supported by a deep talent base, major employers and robust technology, AI, life sciences, aerospace, maritime, higher education, healthcare and public infrastructure sectors. Near-term demand is led by mission critical projects and publicly funded work across multiple sectors.

Private sector activity is uneven, with some submarkets experiencing slower conditions while others continue to perform well. Growth is becoming more distribution- and transit-oriented, with transportation investments, housing needs and local planning concentrating development into emerging urban hubs. While most projects are moving forward, general contractors are collaborating closely with clients to refine scope, rebalance priorities and protect schedules amid evolving cost pressures.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Seattle's market position and forecast?

Dan Curtiss

Vice President

Ivi Gabales

Senior Business Development Director

Portland, OR

With a Shifting Market, Now Is the Time to Build

The Portland construction market continues to adjust to a slower pace of private development. The increased competition for work, better bid coverage and greater cost predictability is creating a more favorable environment for owners. At the same time, the region benefits from strong investment in infrastructure, healthcare, education, semiconductor manufacturing and industrial development.

Looking ahead, local market conditions will be influenced by national factors like interest rates, federal infrastructure and domestic manufacturing investment and potential trade policy shifts. For the Portland region, these factors could affect the pace of private development as well as material costs and equipment procurement. Still, the area's pipeline of public investment and technology-driven growth should continue to provide a solid foundation for construction activity.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Portland's market position and forecast?

Matt Richardson

Vice President

Debbie Hutchins

Senior Vice President - Business Development

San Francisco, CA

Bay Area Construction Shows Steady Growth in AI, Infrastructure and Healthcare Sectors

The Bay Area construction market remains strong in public infrastructure and healthcare due to 2030 seismic compliance requirements. Data centers are also a thriving market sector, with AI-driven investment continuing to accelerate demand for mission-critical facilities and power infrastructure. AI-related leasing has also driven modest improvements in office construction, alongside tenant improvements and building repositioning, though speculative development remains limited.

Cost escalation has generally stabilized. However, steel, MEP systems, electrical equipment and long-lead power-related components continue to face pricing and procurement pressures. Labor availability remains stable overall but is tightening for specialized healthcare, data center, infrastructure and MEP trades.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss San Francisco's market position and forecast?

Raki Chaitt

Director - Preconstruction

Laura Hawley

Vice President - Business Development

Phoenix, AZ

Semiconductor and AI Investments Continue to Power Arizona Construction Growth

Phoenix's advanced technology construction market remains exceptionally strong in mid-2026, driven by semiconductor, AI and data center projects. TSMC's ongoing Arizona expansion, along with Intel and hyperscale data center developments, continue to absorb skilled labor and place pressure on wages, subcontractor availability and project costs.

Labor shortages, particularly for electricians, pipefitters and mission-critical trades, remain a key challenge. Advanced manufacturing and technology infrastructure are the strongest sectors, while traditional commercial development is comparatively slower. Overall, the region's mega-project pipeline is expected to keep construction volume elevated through 2026 and beyond.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Phoenix's market position and forecast?

Jeff Smoker

SVP - Preconstruction

Erika Pham

Vice President - Business Development

Dallas, TX

North Texas Construction Shifts Toward Specialized Growth

North Texas construction remains strong, but growth is becoming more targeted. Industrial activity is shifting toward specialized build-to-suit, advanced manufacturing, logistics and data center projects, especially in Fort Worth, Southern Dallas and Collin County. Corporate expansion is concentrated in Plano and Frisco, driving office, retail and hospitality demand.

Multifamily is stabilizing as deliveries slow and absorption improves. Office recovery is gaining traction in top-tier properties, while older buildings face repositioning pressure. Mixed-use and master-planned projects are moving into vertical construction, while retail remains a standout sector with low vacancy and strong suburban and mixed-use demand.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Dallas's market position and forecast?

Linh Le

Vice President

Kimberly Burke

Senior Vice President - Business Development

San Antonio, TX

Manufacturing, Megaprojects and Regional Momentum

Central Texas continues to attract significant investment across the manufacturing, technology and healthcare sectors. Recent announcements of Toyota's $3.6-billion expansion in San Antonio and the $100-billion planned Tesla/SpaceX Terafab facility in Austin are reinforcing the region's position as a hub for advanced manufacturing.

Data center development remains robust, while major healthcare initiatives, including the new multi-billion-dollar UT Dell Medical Center campus in North Austin, are adding to an already strong project pipeline. Together, these large-scale investments are sustaining construction demand but also increasing competition for labor and materials. These trends highlight the importance of early planning, procurement and trade partner engagement.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss San Antonio's market position and forecast?

Chris Hillyer

SVP Precon

Steve Lyons

Vice President - Business Development

Houston, TX

Houston Bolstered by Life Sciences and Industrial Work

Houston's Q3 2026 market is shifting from planning to execution, led by Eli Lilly's Generation Park project, which is catalyzing a broader life sciences manufacturing ecosystem. Industrial demand remains strong, especially near Port Houston, East/Northeast Houston and key logistics corridors, though developers are more selective and are focused on build-to-suit and specialized facilities.

Infrastructure investment is driving mixed-use and industrial site selection, while adaptive reuse is reshaping downtown. Healthcare remains a stable growth anchor through the Texas Medical Center. Overall, Houston's outlook is positive, supported by major projects, regional connectivity and long-term institutional investment.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Houston's market position and forecast?

Linh Le

Vice President of Preconstruction

Hunter Curry

Business Development Manager

Cincinnati, OH

Infrastructure, Data Centers and Industrial Markets Drive Significant Growth

The Southwest Ohio construction market remains strong, driven primarily by infrastructure, industrial and data center projects, all of which fuel long-term growth prospects. Notable projects like the Brent Spence Bridge Corridor, Western Hills Viaduct Replacement and ongoing ODOT programs sustain demand for heavy civil, utility, concrete and structural steel trades. Both industrial and data center projects continue to absorb resources and command premium pricing to meet schedules.

The office market is showing signs of recovery from the pandemic slowdown, and multifamily construction is stabilizing, but healthcare construction is showing some decline. The aviation market remains steady. Long-lead items such as electrical and mechanical equipment create the most significant procurement challenges. Owners are attempting to navigate this through equipment reuse on renovation projects, early procurement packages and phased construction.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Cincinnati's market position and forecast?

Shannan Plogsted

VP - Preconstruction

Brian Bozeman

Vice President - Business Development

Nashville, TN

Major Projects Continue to Drive Market Activity

Middle Tennessee remains one of the Southeast's most active construction markets, supported by corporate investment, infrastructure expansion, healthcare growth and continued population gains. The East Bank redevelopment, which includes Oracle's planned campus, several mixed-use commercial developments, the Tennessee Performing Arts Center and supporting infrastructure, is driving long-term demand across the region.

Industrial development remains strong, while the regional pipeline is filled with airport, healthcare and mixed-use projects. Although financing challenges and labor constraints are extending some schedules, subcontractor interest remains healthy. Overall, sustained project activity and workforce demand are expected to drive higher construction cost escalation trends over the next two years.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Nashville's market position and forecast?

Adam Hicks

Vice President - Preconstruction

Bryan Hay

Vice President - Business Development

North Carolina/Virginia

Backlogs are Full and Labor is Tight as Key Sectors Drive Growth

Across North Carolina and Virginia, market activity remains positive but concentrated in sectors with durable funding and long-term demand: healthcare, life sciences, advanced manufacturing, mission critical and power-related work. Labor availability, metals, electrical gear and power infrastructure continue to put pressure on pricing and schedule.

North Carolina is building on positive momentum anchored by healthcare, life sciences, pharma and advanced manufacturing. While the recently enacted state budget provides meaningful capital investment, it largely reinforces ongoing activity rather than creating a significant wave of new opportunities. In Virginia, data centers and power-related development dominate the market. Demand remains strong, but growth is placing added strain on electrical infrastructure, procurement timelines and permitting, making power and early infrastructure planning key drivers of cost and schedule certainty.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Durham's market position and forecast?

Chris Littlefield

Vice President of Preconstruction

Bob Myer

Senior Vice President - Business Development

Atlanta, GA

Data Centers Lead Atlanta's Construction Momentum

Atlanta's construction market remains strong, with data center development emerging as one of the region's most active sectors. Utility availability, fiber infrastructure, low power costs and Atlanta's position as a major network hub continue to attract hyperscale and colocation providers, driving significant investment in large-scale data center campuses.

Industrial and logistics construction remains healthy, while multifamily development is moderating as new supply is absorbed. Office construction is limited, but overall market fundamentals are supported by population growth, corporate relocations and infrastructure spending. For contractors, data centers represent one of the strongest sources of high-value project opportunities through 2026.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Atlanta's market position and forecast?

Dane Wooley

Vice President, Preconstruction

Veronica Gross

Vice President - Business Development

Orlando, FL

Optimistic About Growth and Wary About Potential Risks

Orlando remains one of the strongest construction markets in Florida and the Southeast, driven by sustained population growth, tourism investment, transportation infrastructure improvements and continued economic diversification.

As we enter the second half of the year, labor shortages, material escalation and increases in insurance costs top the list of potential risks that could slow the region's growth.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Orlando's market position and forecast?

Tom Stickrod

Vice President Preconstruction

Jan-Erik Hustrulid

Director - Business Development (Prof)

Tampa, FL

New Starts Fuel a Strong Market

The Tampa construction market remains healthy and well-positioned for continued growth. Today, market activity is being driven less by speculative development and more by a balanced combination of mixed-use construction, infrastructure investment, healthcare projects and urban redevelopment initiatives.

While elevated financing, insurance costs and labor shortages are creating challenges across the industry, Tampa continues to offer strong opportunities.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Tampa's market position and forecast?

Jeff Courtney

Sr. Preconstruction Manager

Mandy Weitknecht

Senior Vice President - BD

Miami, FL

South Florida is Heating Up

South Florida continues to lead the nation in multifamily and commercial office work, with ultra-luxury projects leading the way. The market's backlogs are also anchored by seaport programs, public infrastructure and aviation projects.

Material escalation continues to creep upward, most recently driven by the spike in fuel prices. However, larger firms with annual contracts in place are benefiting from more stable price inputs. Mechanical and electrical equipment lead times remain at 52 weeks or more. Make efforts to partner early with preferred trade partners to secure a spot in their backlog and build budget confidence.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Miami's market position and forecast?

Walt Chislak

Preconstruction Manager

Mandy Weitknecht

Senior Vice President - BD

Washington, DC

Data Centers and Infrastructure Drive Growth in a Strong D.C. Market

The Washington, D.C. construction market remains strong, driven primarily by data centers, infrastructure, aviation, federal projects and the planned growth around the Commanders' stadium. Northern Virginia's hyperscale data center boom continues to strain labor availability and electrical equipment supply, while Maryland is emerging as a secondary data center hub through the Quantum Frederick development and quantum technology initiatives.

Labor shortages, power infrastructure constraints and long-lead electrical equipment remain cost risks, with major projects such as the American Legion Bridge/I-495/I-270 corridor improvements further tightening labor markets. Office construction remains weak due to high vacancies and hybrid work trends, while multifamily growth is moderate.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Washington DC's market position and forecast?

Tom Strawbridge

Vice President of Preconstruction, Washington, D.C.

Jackie Ryan

Director - Business Development

Philadelphia, PA

Construction Outlook Remains Cautiously Optimistic Despite Economic Headwinds

Commercial construction across Southeast Pennsylvania, Delaware and South Jersey continues to outperform expectations, led by healthcare, life sciences, industrial and data center projects. While elevated interest rates and tighter lending standards continue to limit office and mixed-use development, owner-occupied facilities, tenant fit-outs and build-to-suit projects remain active.

Demand for skilled electrical, mechanical and HVAC trades is expected to stay elevated, keeping labor costs firm, while pricing for key materials has largely stabilized. With financing conditions gradually improving and a healthy project backlog, the region is well positioned for steady commercial construction activity through the remainder of 2026.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Philadelphia's market position and forecast?

Jim Lane

Sr. Vice President Preconstruction

Michelle Santoro

Senior Director - Business Development

New Jersey

Growth Meets Scrutiny

New Jersey's construction market maintained strong momentum through the second quarter of 2026, supported by continued investment in infrastructure, healthcare, utilities and institutional projects. Material pricing remained relatively stable, although electrical equipment and steel-related components continued to place pressure on project budgets.

Data centers remain one of the state's most active sectors, with large-scale AI developments in South Jersey drawing increased attention amid concerns over energy demand, water consumption and broader community impacts. Labor availability also poses a key challenge, particularly among electrical and mechanical trades, as major projects compete for a limited pool of skilled workers.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss Parsippany's market position and forecast?

Nick Culver

Vice President of Preconstruction

Tracy Anderson

Senior Director - Business Development

New York, NY

New York Construction Advances, Supported by Key Growth Sectors and Regulatory Changes

New York's construction sector remains resilient despite high interest rates, cost inflation and financing uncertainty, though some major projects are being delayed until market conditions improve.

Residential construction is expected to lead activity, supported by housing demand and local policy changes supporting new development. Healthcare is benefiting from regulatory easing, driving hospital investment in ambulatory, urgent care and infrastructure upgrades. Public infrastructure is also set for renewed momentum, with major long-term projects strengthening the market through 2027. Life sciences remains weak, with vacancy reaching 32.5 percent, and new legislation has paused environmental permits for data centers for up to one year while the state develops a regulatory framework. Higher education remains cautious as institutions prioritize deferred maintenance and modernization over new development.

Local Construction Cost Forecast

Next 6 months

6 months - 1 year

1 - 2 years

Status Key

Trending Up Significantly
+6% per annum

Trending Up
4-6% per annum

Stable/Consistent
<4% per annum

Trending Down
Market is recessed

Want to discuss New York's market position and forecast?

Pratod Padalkar

Vice President of Preconstruction

Sara Francini

Senior Vice President - BD

Local Cost Escalation Summary

Time Frame

West

CA - SF

South

FL - MIA

FL - ORL

FL - TPA

NC/ VA

TX - DFW

TX - HOU

TX - SAT

East

Market Condition and Construction Price Inflation

Recessed - price inflation is flat or negative

Stable - price inflation is within traditional indices, less than 4% per annum

Busy - price inflation is above normal, 4 - 6% per annum

Significantly busy - price inflation, +6% per annum

Market Sector Summary

Market Sector Condition

Skanska is not tracking this sector closely enough in our regional market to comment

Market sector is slow with few large active projects either in preconstruction or construction

Market sector is stable with some large active projects either in preconstruction or construction

Market sector is very busy with many large active projects either in preconstruction or construction