Construction Operations & Insights

How Contractors Can Beat High Costs and Labor Shortages in 2026

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In short:

  • Costs continue to rise while 92% of construction companies can't fill all their needed roles.
  • Overall construction investment is up 7% this year, but the real growth is in industrial, commercial, and military work.
  • Construction starts are dropping from $177.9 billion in 2025 to around $148 billion by 2027.
  • Choosing easy-to-use project data software like ConstructConnect® Project Intelligence ensures adoption sticks and keeps teams competitive.

Planning for Success in a Tight Market

The construction market is feeling the pressure these days. Material costs are climbing, and it's getting harder to find skilled workers. Depending on where you're working, some areas are busier than others.

The upside? Contractors who use smart tools and up-to-date data will stay ahead of the curve, even with an uncertain future.

Here are three straightforward ways you can do the same, based on what works, not wishful thinking.

1. Sharpen Your Project Focus with Real Data.

Some parts of the industry are busy while others are slowing down. According to the latest numbers from ConstructConnect®, construction investment in the U.S. is up 7% this year, mostly thanks to industrial, commercial, and military projects. On the flip side, sectors like education, medical, and residential are still struggling.

If you work in the Western U.S., keep in mind that project starts are dropping from $177.9 billion in 2025 to about $148 billion by 2027 as big projects wrap up. Civil construction is still holding strong, though.

So, what does this mean for 2026? The smart move is to be more selective with your bids. Use project data tools like ConstructConnect® Project Intelligence to go after jobs that fit your strengths and needs, whether that's your trade, your area, or season. When you're strategic, you cut down on wasted bids, boost your margins, and come out on top more often.

Looking for help picking the right software? Check out our free guide: The Contractor’s Guide to Adopting Software with Ease.

2. Use Automation and Smarter Tools to Reduce Labor Strain.

Filling construction roles is still a big headache. The latest AGC survey found that 92% of U.S. construction companies can't find enough workers, and about a third say shortages are causing delays. To top it off, construction jobs have dropped for three months straight, even though pay is going up.

Here's what helps: Take the easy, repetitive stuff off your team's plate. The more you can automate the tedious tasks—like paperwork, takeoffs, estimates, and tracking down subs—the more time your crew has for the important work.

Tools like AI-assisted Takeoff Boost™ by On-Screen Takeoff® can speed up your preconstruction work and help everyone focus on winning more jobs.

3. Choose Easy-to-Use Project Data Software.

Maybe you already have project data tools, but if they're clunky, messy, or loaded with outdated info, they're just making your life harder.

When you're shopping for new software, look for stuff that makes your day easier:

  • Can you filter databases by trade, region, timeline, or type?
  • Can you set alerts or save your searches, so you never miss a good opportunity?
  • Is there mobile access, so your team can get the info they need from anywhere?
  • How fast and simple is the onboarding process?

The Bottom Line

Sure, costs are up and it's tough to find workers right now, but you've got options. If you zero in on the right projects, take advantage of automation, and use solid project data tools, you can set yourself up to win in 2026.

Want to get a head start on 2026? Grab The Contractor’s Guide to Adopting Software with Ease to see how the right tools can help you roll with whatever comes next.


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