Rider Levett Bucknall (RLB) has released its second quarter 2026 Quarterly Construction Cost Report (QCR), highlighting a period of strategic alignment and healthy stabilization across the North American construction market. Current data confirm that construction cost inflation has settled into a sustainable quarterly pace of approximately 1%, allowing developers to advance long-term capital investments with greater clarity.

RLB’s tracking shows an industry grounded in steady progress and structural strength. Driven by a major influx of data center developments, infrastructure assignments, healthcare facilities, and educational construction, the national construction backlog indicator rose to 8.8 months this quarter. This robust pipeline provides a substantial runway of work for commercial and industrial contractors moving into the second half of the year.

“As we navigate localized transport and fuel pressures this quarter, our overarching outlook remains decisively optimistic,” stated Paul Brussow, President of Rider Levett Bucknall North America. “Contractors across all size categories continue to report high confidence, and by leveraging hyper-local intelligence alongside proactive project controls, owners and developers are successfully advancing their pipelines with strong cost control.”

Key Trends from the Second Quarter 2026:

• A Market of Healthy Realignment: Construction cost patterns show a healthy distribution rather than a broad market shift. Vibrant urban markets like Honolulu (5.93% annual change), Phoenix (5.30%), and Miami (4.99%) continue to lead cost growth. Meanwhile, key metropolitan zones have established stable, predictable pricing baselines, including Chicago at 1.42%, Dallas at 3.88%, and Washington DC at 4.01%.
• Canadian Infrastructure Surges: Non-residential investment in Canada remains highly active. Alberta’s energy sector has served as a powerful economic catalyst, maintaining major construction momentum over the last few years. Concurrently, Ontario’s market continues to show resilience, supported by a 16% increase in public-sector spending on major infrastructure initiatives, such as the Darlington Small Modular Reactor project, helping offset modest homebuilding trends.
• Navigating Logistics Volatility: Supply-side updates indicate that current project budget pressures stem from rising transportation and fuel costs rather than broader material or labor shortages. The re-routing of global shipping lanes due to conflicts in the Middle East has placed direct upward pressure on energy prices. RLB notes that while these logistical shifts require close observation to avoid localized transit delays, overall contractor sentiment remains positive across all sectors.

Strategic Outlook:
RLB emphasizes that broad national averages can mask localized market behaviors. To achieve success in a market defined by regional variation, owners and developers must utilize precise, hyper-local intelligence. By optimizing procurement strategies early, building flexible cost models to isolate logistical risks, and incorporating robust project controls, developers can successfully protect project margins.

The full report can be accessed at: 2026 Quarterly Construction Cost Report (QCR),

The Nonresidential Construction Index (NRCI) rose to 55.1 in Q3 2026, up from 53.4 in Q2, as sentiment firmed across most components and moved the index further into expansion territory.

Views on the overall U.S. and the local economies where respondents operate both strengthened to 54.3 and 56.9, respectively, holding comfortably above the midline. Expectations for their own construction businesses remained the strongest component at 70.7, up from 65.2 in Q2, while sentiment toward construction activity in their local markets improved to 64.7. Backlog expectations climbed to 69.8 from 64.3, signaling solid workload visibility into the back half of the year. Cost input readings fell sharply, with materials at 16.4 and labor at 19.8, both well below 50.0 and signaling broad expectations of further cost escalation. Lastly, productivity dipped just below the neutral line to 49.1 as efficiency gains proved hard to sustain.

This index, typically found in the North American Engineering and Construction Outlook report, is being published as soon as it’s available. The full report will be released in the coming weeks. Our survey participants enable us to provide vital insights into current trends and market conditions. If you’re interested in contributing, we encourage you to fill out the NRCI sign up form.

The Civil Industry Construction Indicator (CICI) recovered to 52.3 in Q3 2026 from 50.1 in Q2, reflecting a broad firming in sentiment across civil infrastructure markets.

Respondents were mixed on the broader U.S. economy, with views on the overall slipping to 45.5 from 46.7, while sentiment toward the local economies where they operate improved to 51.8, back above the midline. Expectations for their own construction businesses rose to 59.1 from 54.2, as construction conditions in their local markets recovered to the neutral line. Backlog measures strengthened to 57.2 from 54.7, and the book-to-burn rate jumped to 57.4 from 48.9, pointing to refilling pipelines. Cost input readings stayed weak, with materials at 18.9 and labor at 21.7, both well below 50 and signaling broad expectations of further cost escalation. Productivity climbed to 52.8 from 50.0, extending a modest bright spot as crews maintained efficiency despite an uncertain demand outlook.

These index numbers, typically found in the Civil Infrastructure Construction report, are being released as soon as they’re available. The full report will be available in the coming weeks. Our survey participants enable us to provide vital insights into current trends and market conditions. If you’re interested in contributing, we encourage you to fill out the CICI sign up form.

The above table and accompanying arrows illustrate how individual components contribute to the overall index score compared to the prior quarter. For most components, scores above 50 signal healthy or expansionary market conditions quarter over quarter. Cost of materials and cost of labor are exceptions whereas lower values in these components indicate expectations for rising prices and serve as a counterbalance.

ABC’s Construction Backlog Indicator Slips, Contractors Remain Confident in June

Associated Builders and Contractors reported that its Construction Backlog Indicator fell to 8.8 months in June, according to an ABC member survey conducted June 22 to July 8. The reading is down 0.3 months from May but up 0.1 months from June 2025.

View ABC’s Construction Backlog Indicator and Construction Confidence Index for June. View the full Construction Backlog Indicator and Construction Confidence Index data series.

Only the Middle States region experienced backlog growth on a monthly basis in June. In the Northeast region, backlog contracted sharply in June and is down by over a month from a year ago.

ABC’s Construction Confidence Index readings for sales and staffing levels increased in June, while the reading for profit margins inched lower. The readings for all three components remain above the threshold of 50, indicating expectations for growth over the next six months.

“While backlog declined in June, it’s still longer than any point from September 2023 to April 2026,” said ABC Chief Economist Anirban Basu. “This strength is the result of continued booming data center construction. The 13% of ABC members under contract to work on data centers have significantly higher backlog (11.0 months) than the 87% that are not (8.5 months). This trend is noticeable headwind for smaller contractors—just 8% of contractors with less than $100 million in annual revenues have data center work under contract, well below the 41% share of contractors with greater than $100 million in annual revenues.

“The effect of rising input prices may be weighing on contractor profitability,” said Basu. “Contractor confidence regarding profit margins fell to a seven-month low in June, though expectations remain above the prevailing level from the second half of 2025.”

Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to better reflect the survey period. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months. View the methodology for both indicators.

Construction Materials Costs Fall With Oil Prices in June

Construction input prices decreased 1.1% in June compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices also decreased 1.1% for the month. Overall construction input prices are 7.6% higher than one year ago, while nonresidential construction input prices are 7.4% higher. Prices decreased in 2 of the 3 energy subcategories last month. Crude petroleum prices declined 12.1%, and unprocessed energy materials fell 8.1%. Natural gas prices were up 16.6% in June. “Aggregate construction input prices receded in June due to the steep decline in oil prices that occurred throughout the month,” said ABC Chief Economist Anirban Basu. “Despite that decline, however, ongoing materials price escalation is likely over the coming months. The conflict in Iran has resumed, triggering a roughly 15% rebound in oil prices, and tariff-affected commodities like iron, steel and copper continue to experience steep price increases. “While contractors remain optimistic about their margins, according to ABC’s Construction Confidence Index, higher input costs will likely weigh on profitability during the second half of 2026,” said Basu.

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.

AGC:

Construction Employment Increases In 33 States And D.C. From June 2025 To June 2026; 28 States And D.C. Add Construction Jobs From May To June

Texas and Louisiana Have the Largest Number and Percent of 12-Month Increases, While California and New Hampshire Lag; New Mexico and Texas Top Monthly Gainers, While California and Montana Have the Largest Monthly Losses

Construction employment increased in 33 states and the District of Columbia from June 2025 to June 2026, while 28 states and D.C. added jobs between May and June, according to an analysis of new federal data released today by the Associated General Contractors of America. Association officials cautioned, however, that several policy developments, including uncertainty surrounding tariffs, highway funding, and data center development, could undermine future construction demand.

“Construction employment gains were more widespread in June, with more states adding jobs than losing them over both the month and the year,” said Macrina Wilkins, the association’s director of market insights. “States benefiting from strong infrastructure, energy, manufacturing, and data center investment continue to lead construction hiring, while higher financing costs remain a headwind for several private construction sectors.”

Between June 2025 and June 2026, 33 states and the District of Columbia added construction jobs, 14 states shed jobs, and employment was unchanged in Delaware, Mississippi and North Dakota. Texas added the most construction jobs (24,800 jobs, 2.7 percent), followed by North Carolina (15,500 jobs, 5.6 percent), Ohio (11,900 jobs, 4.6 percent), Illinois (10,700 jobs, 4.5 percent) and Louisiana (10,500 jobs, 7.7 percent). Louisiana posted the largest percentage gain over 12 months, followed by the District of Columbia (6.6 percent, 900 jobs), Minnesota (6.3 percent, 8,900 jobs), North Carolina and Missouri (5.5 percent, 8,300 jobs).

California lost the most construction jobs from June 2025 to June 2026 (-15,400 jobs, -1.7 percent), followed by Virginia (-4,600 jobs, -2.0 percent), New York (-4,300 jobs, -1.1 percent), Georgia (-4,100 jobs, -1.7 percent) and Michigan (-3,600 jobs, -1.8 percent). The largest percentage loss was in New Hampshire (-2.5 percent, -800 jobs), followed by Virginia, Michigan, New Jersey (-1.8 percent, -3,000 jobs) and Rhode Island (-1.8 percent, -400 jobs).

For the month, industry employment increased in 28 states and the District of Columbia, declined in 20 states, and was unchanged in South Carolina and West Virginia. Texas added the most construction jobs (5,200 jobs, 0.6 percent), followed by Ohio (3,900 jobs, 1.5 percent), Massachusetts (3,700 jobs, 2.2 percent), North Carolina (2,900 jobs, 1.0 percent) and Louisiana (2,000 jobs, 1.4 percent). The largest percentage gain occurred in New Mexico (3.2 percent, 1,700 jobs), followed by Massachusetts, North Dakota (2.0 percent, 600 jobs), Alaska (1.6 percent, 300 jobs) and Ohio.

California lost the most construction jobs from May to June (-4,100 jobs, -0.5 percent), followed by New York (-3,900 jobs, -1.0 percent), Washington (-2,100 jobs, -1.0 percent), Wisconsin (-2,100 jobs, -1.4 percent) and Minnesota (-1,100 jobs, -0.7 percent). The largest percentage loss was in Montana (-1.6 percent, -600 jobs), followed by Wisconsin, Rhode Island (-1.3 percent, -300 jobs), New York and Washington (both -1.0 percent).

Association officials said that several policy developments could undermine some of the industry’s strongest sources of demand. Growing state and local resistance to data center development, uncertainty surrounding electric power availability for new projects, the lack of progress in Congress on a long-term highway and transit bill, and continued uncertainty surrounding tariffs on construction materials all threaten future construction activity.

“Construction firms continue to add workers where demand remains strongest,” said Jeffrey D. Shoaf, the association’s chief executive officer. “Policymakers can help sustain that momentum by providing certainty for infrastructure investment, supporting the expansion of our nation’s energy capacity, and avoiding policies that increase the cost of key construction materials and create unnecessary uncertainty for construction employers.”

View June 2026 state employment data and 1-month, 12-month rankings.