The first quarter of 2026 brought a mixed picture for construction spending. While residential starts showed signs of recovery, commercial and infrastructure projects continued to face margin pressure from elevated input costs.
Key Takeaways
- Residential construction spending rose 3.2% quarter-over-quarter, driven by multifamily projects in Sun Belt markets.
- Commercial construction remained flat, with office and retail segments still adjusting to post-pandemic demand patterns.
- Infrastructure spending accelerated thanks to continued federal funding, with highway and bridge projects leading the way.
Material Price Watch
Lumber prices stabilized after the volatility of late 2025, settling into a range that's roughly 8% below peak levels. Steel, however, ticked up 4% due to supply chain disruptions in key manufacturing regions.
Concrete and aggregate prices remained largely stable, though regional variations are significant — projects in the Southeast are seeing 5-7% higher prices compared to the national average.
What This Means for Your Projects
The data suggests a cautiously optimistic outlook. Teams that track pricing trends closely will be better positioned to time purchases and lock in favorable rates. For the rest of 2026, expect continued divergence between regions and material categories — one-size-fits-all budgeting assumptions are riskier than ever.