USA, CANADA & MEXICO are forecast to see between 2.2% to 2.8% GDP growth in 3rd Q of 2026.
The 4+ month long Iran conflict is the main reason construction materials are increasing. May & June have seen construction materials in the US increase between 2.3% & 2.9%. If this trend continues, we could see construction inflation north of 10% by years’ end.
The USA is currently winning the global AI Data Center race against its main rival China, primarily in Tier III & IV high end type facilities. The AI data center market in the US is experiencing rapid expansion, with new $1 billion to $2 billion facilities announced almost weekly across the USA. In the next 5 years, approximately 2,500 new AI Data Centers are forecast to be built worldwide! Capital expenditures (CAPEX) in this sector continue to accelerate as demand for AI infrastructure grows. Current forecasts project that global investment in AI data centers will exceed $1 trillion across 2026 and 2027!
The US is experiencing an incomparable growth in LNG and associated infrastructure facilities. There are as many as 6 major US onshore & offshore LNG CAPEX Projects located on the US Gulf coast (values at $25 to $40 billion) that have attained a Final Investment Decision (FID). These facilities are planned to be commercially operational between 2029 and 2030.
The US construction sector is facing extraordinary challenges that include a skilled workforce that is shrinking by the month due to retirement and AI utilization throughout the construction sector. More than 300,000 US baby boomers are retiring each month, 10% to 20% of these individuals were part of the US construction sector, the question is, who is going to replace them, will we always have this shortage of skilled workers.
Fast forward 5 to 10 years and the US construction sector will look completely different from today.
A new 170,000 barrel a day oil refinery has been announced that will be located on a 250-acre lot, close to Brownsville, Texas. Construction started in April, 2026 and the project is planned to be operational in the 1st half of 2029. This is the first major new grassroots refinery to be built in the USA in more than 50 years. This could bring 1,000’s of new jobs and additional investment to the South Texas region.
The US continues to be the # 1 economy, containing the largest related construction sector in the world, with its close to a $31 trillion economy that powers its unsurpassed technology know-how & creativity. The US Construction sector has the know-how & worldwide influence. In 2026, the value of this market is between $2.3 & $2.7 trillion, by far the largest construction market in the world.
The US construction industry prediction for 2026 indicates restrained growth, perhaps 2.3% to 2.7% increase from the previous year. AI Data centers, Semiconductor / microchip facilities, Pharma & Hi-Tech & Manufacturing, Power / Pipeline projects & Infrastructure projects, will be the projects being undertaken in the 2nd half of 2026. Housing, commercial office, shopping malls etc., will see a slight decline in 2026. US tariffs on imported materials into the USA is a real issue, these tariffs on steel, cooper, aluminum & other construction materials & components are averaging out to be in the 12.5% to 17.5% range, this tariff issue is still not fully implemented & is subject to negotiation & change it seems on a weekly basis.
The 2026 US / Canadian / Mexico Construction market is estimated to be in the $3.10 to $3.25 trillion range, an increase of 2.7% from 2025 (Year to Year), still the world’s largest construction market.
Canada’s construction market is projected to grow to C$285 billion by the end of 2026. Canada’s construction activity in the 3rd Q of 2026 is forecast to expand marginally by 1.6% to 1.9% over 2025 levels. Construction material costs are set to increase by 2.2% to 3.7% and construction labor will see an increase of 2.5% to 2.9% in 2026. The Canadian infrastructure, civil engineering, mining and Oil & Gas construction sectors are experiencing a pick-up as we move further into 2026.
The Canadian dollar is still relatively weak compared to the US dollar, one Canadian dollar is 0.71 to the US dollar, which has been in this range for the last year or so. The thinking was that the US tariffs would stymy the Canadian economy more than it has. Tariffs on timber / lumber products, steel & aluminum have cause Canadian suppliers some problems, but perhaps not as bad as some commentators forecasted. Current Canadian construction growth rate is between 1.9% & 2.4%; construction unemployment is between 7.2% & 7.9% range.
Mexico’s construction sector is forecast to experience positive growth in the 2nd half of 2026, driven by infrastructure, commercial construction and a number of petro-chemical capital projects.
The # 1 question for the USA, Canada & Mexico construction sectors is how long will the Iran conflict last and will it drive up inflation in the next 3 to 6 months.
