A majority of U.S. contractors are bracing for negative impacts from economic and policy pressures, yet nearly three-quarters (74%) remain optimistic about their business performance in 2026, according to a new study from Dodge Construction Network in partnership with CMiC.
The report, Key Business Trends for U.S. Contractors in 2026 SmartMarket Brief, highlights a construction industry navigating a growing convergence of challenges—from tariffs and inflation to labor shortages and increased project risk—while adapting strategies to remain competitive in a more constrained environment.
Policy and Cost Pressures Are Driving Widespread Concern
An average of 72% of contractors anticipate negative business impacts tied to government policies, including tariffs, immigration enforcement and above-target inflation.
Tariffs, in particular, are having a significant effect:
- 91% report cost impacts from them on their projects
- 78% expect ongoing or expanded tariffs to negatively affect US construction volume
At the same time, contractors report increasing difficulty securing profitable work amid tightening conditions:
- 84% of contractors are facing aggressive competitive pricing
- 80% cite declining design documentation quality
- 68% report inadequate bid coverage from specialty trades
- 62% say contract terms are becoming more onerous, shifting risk downstream
Nearly half (46%) expect these challenges to worsen in the next year and further impact their competitiveness.
“Contractors today are navigating a convergence of cost, policy, and labor pressures — yet the industry’s resilience shines through in its continued optimism,” said Shirin Ali, Head of Marketing at CMiC. “As firms grow more selective and risk-aware, real-time visibility across financials and projects becomes essential to protecting margins and staying competitive. In times like these, forward-thinking leaders recognize that the right technology isn’t just a tool — it’s the engine that drives their success.”
Contractors Shift Strategies to Manage Risk
To minimize the impact of these external factors, contractors are becoming more selective in the projects they pursue, placing greater emphasis on project fit, risk exposure and profitability.
Additional strategies include:
- increased scrutiny of contract terms
- greater focus on early engagement with project stakeholders
- expanded investment in preconstruction planning
Labor Shortages Continue Despite Slowing Work
Nearly three quarters (72%) report losing workers to retirement, competitors, and workers leaving the industry, with retirement cited as the primary driver. Impacts of the worker exodus continue to be felt:
- 65% experience schedule impacts
- 47% are compelled to submit higher bids
- 44% turn down work opportunities
Project Complexity and Execution Challenges Are Increasing
Contractors also report rising project delivery challenges:
- Over 80% cite compressed schedules and post-bid material cost increases
- Between two-thirds to three-quarters report growing project complexity and material availability issues
Despite Challenges, Contractors Remain Optimistic
Nearly three-quarters (74%) are optimistic about their company’s performance in 2026. However, confidence is notably stronger among large contractors, while smaller firms are less likely to report strong financial health.
“In recent years, labor shortages have dominated contractors’ concerns, but that’s no longer the full story,” said Steve Jones, Senior Director Industry Insights at Dodge. “A slowdown in new business opportunities now rivals workforce challenges as a top concern, an issue we haven’t seen in many years. In this more constrained environment, it is critical that contractors bring their best financial and project management game to every project they pursue and build.”
About the Study
The Key Business Trends for US Contractors in 2026 SmartMarket Brief is based on a nationwide survey of general contractors and specialty trade contractors.
For more information or to download the full report, visit www.construction.com.
About Dodge Construction Network
Dodge Construction Network harnesses data, analytics, and industry connections to be the leading source of insights and opportunities in the commercial construction industry. With five trusted solutions – DCC, The Blue Book, Sweets, IMS, and Principia – Dodge connects construction professionals across all stages of the building process. Designed for both small teams and large enterprises, these tools simplify complexity, empowering you to build thriving businesses and communities. With over a century of experience, Dodge Construction Network is the catalyst for modern construction. To learn more, visit construction.com.
About CMiC
As an industry pioneer, CMiC delivers complete and unified Financials and Project Management software solutions for construction and capital projects firms. CMiC’s powerful software transforms how firms optimize productivity, minimize risk and drive growth by planning and managing all financials, projects, resources, and content assets—from a Single Database Platform™. With customers throughout North America and overseas, CMiC serves one-quarter of ENR’s Top 400 Contractors and hundreds of small and mid-sized construction firms, from general and specialty contractors to heavy/highway and project owners. Over $100 billion in construction revenue is handled by CMiC annually.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260504513164/en/
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