While overall construction activity is projected to expand, CCR demand is being reshaped by a cost environment in which labor constraints and policy-driven materials inflation are reordering development pipelines across sectors and markets. Recent data also shows stabilization in construction activity.
Total construction starts are expected to grow 4% to $1.26 trillion in 2026, yet construction costs were up 2.8% year over year in January 2026, and construction input prices remain 43% above early-2020 levels. For many owners, structural volatility has become the baseline assumption in 2026 budgeting.
Materials are not the dominant driver, but they remain a persistent variable: prices averaged 4.2% above 2024 levels in 2025, steel and aluminum stayed elevated under tariffs, and current policies imply aggregate construction costs could rise 8%.
Depending on the material, tariff impacts are expected to range from 5% to 25%, with imported inputs facing outsized increases and supply-chain exposure adding volatility by market, project type, and procurement strategy.
Even with core inflation near 2.4%, material costs are forecast to inflate another 2% to 4% in 2026, and tariff-driven risk scenarios cluster at 7% to 10% escalation.
Labor conditions exert greater pressure on budgets than materials, and the bias remains upward. The industry is estimated to need about 499,000 new workers in 2026, skilled shortages persist, and multifamily labor costs are up more than 20% over five years, alongside total multifamily construction costs rising over 30% versus five years ago. In single-family contexts, general contractors typically charge 10% to 20% of project costs, reflecting the premium for managing complex schedules and regulatory compliance.
In this setting, baseline total project cost escalation of 4% to 6% in 2026 coexists with pockets approaching double digits, such as Chicago, and longer-run expectations still point to building costs rising 15% and tender prices 16% by 3Q2030.
Sector allocations are shifting accordingly. Growth is subdued outside data centers and power projects, with data center activity forecast to increase 7% to $195 billion, nonresidential construction re-expanding 3% in 2026 after a 2% decline, and infrastructure spending remaining strong through mid-2026 due to locked funding, while industrial and multifamily deliveries decline after 2025 and manufacturing momentum cools after earlier CHIPS Act gains.
Robertson Opus captures the shift by aligning CCR engagement with cost escalation tracking, tariff exposure, and labor-related schedule risk in expanding sectors.
