Non-Residential Construction Update "Trimming commercial market outlook,..."

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Non-Residential Construction Update "Trimming commercial market outlook,..."

Powered by Lab Global11 JuneResearch2026ab Evidence UBS YES

Non-Residential Construction Update Equities

AmericasTrimming commercial market outlook, but

structural areas remain strong Industrial

Steven Fisher, CFA

Analyst

steven.fisher@ubs.com

Expect a re-acceleration in 2H 2026, despite headwinds in commercial +1-212-713 8634

We continue to expect US non-residential construction spending to re-accelerate in Avinatan Jaroslawicz

2H26 on the back of structural growth investments, but we are trimming our overall Analyst

forecast slightly to reflect the ongoing weaker pace of office construction and the avinatan.jaroslawicz@ubs.com

potential for higher interest rates to slow certain aspects of commercial construction. +1-212-713 1405

Tweaked total non res forecast. We now forecast total non-residential Judah Aronovitz

construction spending to grow 3% nominally in 2026 and 6.0% in 2027, down Associate Analyst

judah.aronovitz@ubs.com

from 3.8% and 6.5%, respectively, previously.

+1-212-713-4881

Commercial + office changes. While there are some positive signs on warehouse Lauren Sullivan

that continue to support our forecast for a rebound to growth in 2027, we have Associate Analyst

trimmed that growth rate from double digits to upper single digits. We now lauren.sullivan@ubs.com

forecast Core Office (ex-data centers) + Commercial to be -3% in 2026 (was flat) +1-212-713 8230

and +4% in 2027 (was +6%). Julian Radlinger, CFA

Mindful of interest rates and inflation. We had already assumed a slow

julian.radlinger@ubs.com

recovery in the commercial category before the Middle East conflict started mostly +44-20-7901 6558

due to elevated long-term rates. Now, with higher interest rates and construction