Trade policy pressures and geopolitical disruptions are driving construction costs above earlier forecasts, with further acceleration likely in the second half of 2026. The impact varies widely, as companies building in markets with heavy data center activity face the biggest cost jumps and scheduling challenges. These are often in the same high-performing markets driving their real estate demand. According to JLL’s 2026 Construction Perspective: U.S. Midyear Update, recognizing these overlaps and acting before contractor capacity fills up is what separates manageable projects from constrained ones.
The demand split reflects contractors’ varying exposure to high-growth sectors. Contractors with data center exposure carry significantly higher average backlogs of 12.2 months versus 8.3 months for those without, while non-data-center commercial construction spending growth for office, industrial or mixed-use runs below 1 percent in real terms. This creates a window
