Nonres Construction: Nonres Starts Growth Acceleration Pushed to 2028 as 2026 Forecast Improves

Research evidence excerpt

Nonres Construction: Nonres Starts Growth Acceleration Pushed to 2028 as 2026 Forecast Improves

Equity Research

Flash Comment — June 11, 2026

Electrical Equipment & Multi-Industry

Nonres Construction: Nonres Starts Growth

Acceleration Pushed to 2028 as 2026 Forecast

Improves

Our Call Joseph O'Dea

The latest Dodge Starts forecast shows 2026 nonres starts spend +2.8% y/y vs +1.8% Equity Analyst | Wells Fargo Securities, LLC

Joseph.Odea@wellsfargo.com | 212-214-5993

prev, driven by upward revisions in Office (includes DC), Manufacturing and Edu. 2027

Zachary Schechtmannow seen +2.9% y/y vs +4.2% prev, with an acceleration to +6.5% y/y in 2028.

Equity Analyst | Wells Fargo Securities, LLC

Zachary.Schechtman@wellsfargo.com | 212-214-8014

Initial Thoughts Judah Esses

Associate Equity Analyst | Wells Fargo Securities, LLC

Nonres starts growth is now expected to accelerate to +MSD in 2028, 1 year later Judah.E.Esses@wellsfargo.com

than prev forecast, following an upward revision to 2026. In 2Q, 2026 growth was

raised to +2.8% y/y from +1.8% in 1Q, while 2027 is now seen at +2.9%, below the prior

+4.2% forecast. The main driver of the 2026 revision was Office and Bank Buildings, now

expected to grow +8.9% y/y vs +3.8% previously. Healthcare and Warehouses were cut

12% and 5%, respectively, for 2026, while Manuf and Edu were revised upward.

The Office and Bank Buildings growth forecast, which includes Data Center, continues

to accelerate, with the 2025–2030 CAGR rising to ~6% from ~5.5% in 1Q and ~5% in

4Q. The latest PiP data shows DC at 52% of private office spend, up from ~40% at the

start of 2025 and ~30% at the start of 2024. Dodge forecasts 19% growth in Office and

Bank Buildings PiP in 2026. Assuming Office ex-DC declines MSD, in line with April SAAR,