Global Construction Market Intelligence 2026

What are the key findings from this year’s research?  

A two-speed construction market  

Tech-led sectors—particularly data centers and advanced manufacturing— are accelerating rapidly, driven by sustained digital and AI demand.  

Meanwhile, more traditional sectors, including residential and commercial development, are experiencing slower momentum due to heightened uncertainty and structural constraints impacting investor confidence.  

Cost inflation stabilizing  

Despite short term shocks, global construction inflation is expected to rise modestly from 4.2% in 2025 to 4.5% in 2025, before remaining broadly flat in 2027, while material price growth has largely steadied.  

That said, pressure remains in some areas—particularly across mechanical, electrical and plumbing (MEP) components—where demand continues to outpace supply.  

Labor shortages dominate  

Labor shortages remain the most significant constraint, with over 70% of markets reporting skills gaps and little surplus capacity.  

At the same time, contractor capability is tightening in high-growth sectors, increasing competition, pushing up margins and adding to delivery risk. 

Risk landscape 

Volatile energy prices due to the Middle East conflict are creating uncertainty, feeding through to some material costs, although impacts are uneven across regions.  

Short-term logistics and supply chain stress in some locations is adding another layer of uncertainty for clients to manage. 

Against this backdrop, success will depend on planning for local realities, engaging the market early and taking a more proactive approach to managing supply chain and energy risk.  

Clients that invest early in digital capability and AI will be better positioned to navigate complexity, improve productivity and secure long-term advantage. 

Key findings from the report include: 

• Global construction demand is highest in the data centers and industrial and logistics sectors. 
• Global construction cost inflation is expected to rise modestly from 4.2% in 2025 to 4.5% in 2026, before remaining broadly flat in 2027, despite the short-term impact of the conflict in the Middle East. A more stable cost backdrop should serve to encourage activity levels to rise.  
• Labor availability is now the primary driver of cost increases, with Australia and New Zealand experiencing the most acute labor shortages, followed by Europe and Asia. 
• North America has the highest regional labor costs with an average hourly wage of $79.5, followed by Europe and Australia and New Zealand with $75.6 and $68.0, respectively.  
• New York ($7,938 per m²) remains the most expensive construction market in the world, followed by San Francisco ($7,883 per m²) and Geneva ($6,985 per m²), with London ($6,032 per m²) ranking in fifth place.