EXECUTIVE SUMMARY

Where the healthcare construction market stands

2025 was the strongest year on record for U.S. healthcare construction. Spending reached $76.8b (SAAR), up 66% from the revised 2019 baseline of $46.3b and 9.5% over 2024. 2026 is the first real test of whether that momentum can hold.

Through July, spending is running at a $74.7b pace, about 3% below last year's January–July average, though still above any full year before 2025. The demand outlook remains strong: facilities are old (median age 13.2 years, Moody's FY24), the population is aging, and 9,003 federal primary-care HPSA designations identify clinician shortages.

Three factors are driving project cost and schedule risk:

Tariffs

Tariffs are pushing up the cost of key metals. In August 2026, aluminum was up 27.3% year on year, copper 20.9% and steel 23.4%. Section 232 metals rates depend on product, origin and eligibility. Switchgear is up 13.3%, with medium-voltage lead times requiring supplier confirmation.

Labor

Labor remains tight. ABC estimates the industry must attract 349,000 additional workers in 2026. Construction employment reached a record 8.36 million in August, while unemployment sits at 3.1%. Healthcare certifications (ASSE 6010, ICRA) shrink the eligible pool further.

Margins / Price cost

Price-cost pressure persisted through August. Healthcare output prices are up 5.0% while input costs rose 7.9%, leaving a negative spread of 2.8 percentage points (pp). The gap signals continuing price-cost pressure rather than directly measuring contractor profit margins.

National health expenditure reached $5.3t in 2024 (18.0% of GDP) and is projected to hit $6.0t in 2026 and 20.6% of GDP by 2034 (CMS, June 2026). The money behind healthcare construction keeps growing.