Construction bid inflation is flat

We predict a 3.5 percent - 4.0 percent year-on-year escalation in national construction costs for 2026, similar to what was experienced in 2025 and historical trends.

Our Chicago market data for 2025 indicates negative year-on-year growth on average. This was a result of multiple factors, including economic uncertainty stemming from tariff policy, the elevated cost of capital and a competitive construction market. On a macro level, public spending and the data center boom have contributed to industry increases overall. However, in private sector corporate offices, we have seen a decline.

Labor availability has remained consistent, but mechanical and electrical trades have seen some strains due to demand within data centers. Despite increases in material and union labor costs, we expect that bid prices will remain flat in Q1 and Q2 of 2026 due to the limited opportunity pipeline and abundance of competition in the market.