Channel checks: US Construction Outlook "Construction pricing lags highe..."

Research evidence excerpt

Channel checks: US Construction Outlook "Construction pricing lags highe..."

Global Research

26 June 2026ab

Channel checks: US Construction Outlook Equities

AmericasConstruction pricing lags higher input costs

Industrial Equipment

Steven Fisher, CFA

Channel check: Higher input costs to impact construction projects in 2026 Analyst

We spoke with a large general contractor based on the East Coast. Our key takeaways: steven.fisher@ubs.com

+1-212-713 8634

Risk from price/cost disconnect: Construction materials and input costs are

Avinatan Jaroslawicz rising while project pricing is not keeping up. The disconnect between costs and

Analyst

pricing could pressure contractor margins. A similar lag in 2020 led to margin avinatan.jaroslawicz@ubs.com

compression that became evident with a delay. +1-212-713 1405

Relief expected in 2027: Construction cost inflation should moderate (~+4%) as Judah Aronovitz

producer pricing stabilizes, fuel/geopolitical pressures ease, and tariff/policy Associate Analyst

conditions improve post midterm elections. judah.aronovitz@ubs.com

+1-212-713-4881

Conditions vary by market/region: Seeing strength in federal, data center,

Lauren Sullivan

state/local, and higher education projects. Multifamily and private development Associate Analyst

remain subdued as higher for longer rate expectations weigh on resi and lauren.sullivan@ubs.com

commercial activity. In regions with weaker activity, construction pricing is more +1-212-713 8230

competitive. Data center construction pricing generally is more supported.

Producer prices for construction materials up sharply: Producer prices rose

6% in the past six months and are expected to rise 18% by fall 2026.

Supply chain constraints driving costs: Domestic capacity of construction