Construction Trends and Outlook for 2026

As we move through 2025 and look toward 2026, we’ve been reviewing the critical issues and trends affecting the construction industry. While the industry has stabilized since the post-pandemic volatility, new challenges have emerged. Nationwide, the persistent labor shortage remains a primary constraint, while “high-tech” manufacturing and data center construction are booming. In New York City, the focus has shifted heavily toward adaptive reuse, infrastructure modernization, and aggressive new safety regulations.

It is expected that the trends defining late 2024 and 2025, specifically high material costs and a tight labor market, will continue to be major factors into 2026.

Some of the most significant developments in New York City and the broader region include:

MTA’s 2025-2029 Capital Plan

In late 2024, the Metropolitan Transportation Authority (MTA) released its proposed capital plan for 2025-2029. The plan is described as a critical investment in “state of good repair,” aimed at rebuilding the system’s aging backbone. The proposed $68.4 billion budget targets widespread improvements, including:

Subway Modernization: A massive push for signal modernization (CBTC) to improve reliability.
Fleet Upgrades: The purchase of 1,500 new subway cars and 500 zero-emission buses.
Accessibility: Accelerating ADA compliance across stations.
Resiliency: Fortifying the network against flooding and climate events.

While ambitious, the plan currently faces a significant funding gap that state and city officials will need to address in the coming legislative sessions.

The New Era of Megaprojects

The focus of New York’s megaprojects has shifted from new vertical neighborhoods (like Hudson Yards) to massive transportation infrastructure overhauls. Major developments driving the 2025/2026 outlook include:

JFK Airport Transformation: A $19 billion overhaul is well underway. The new Terminal 6 is expected to open its first gates in 2026, joining the recently expanded Terminal 8 and the under-construction New Terminal One.
Port Authority Capital Plan: The Port Authority of NY & NJ has proposed a record $45 billion capital plan for 2026-2035. Key projects include the replacement of the aging Midtown Bus Terminal and continued work on the Gateway Program (Hudson Tunnel), which remains the nation’s most critical infrastructure project.
Data Centers: While not always visible skyscrapers, the explosion of AI demand has made data center construction a dominant sector regionally and nationally.

Safety & Regulation: “Get Sheds Down” & Superintendent Limits

The NYC Department of Buildings (DOB) continues to tighten regulations to enhance safety and quality of life.

“Get Sheds Down”: The city has launched a major initiative to remove long-standing sidewalk sheds. Starting in 2026, stricter enforcement and new design standards will make it costlier for owners to leave scaffolding up for extended periods, incentivizing faster façade repairs.
Superintendent “One-Job” Limit: A significant regulatory change is approaching for site safety. Effective January 1, 2026 (with full implementation phasing in), designated Construction Superintendents will largely be restricted to overseeing one job at a time, replacing the previous allowance of managing multiple sites. This will heighten the demand for qualified safety professionals.

The Persistent Labor Shortage

The shortage of skilled labor remains the industry’s single biggest hurdle. According to Associated Builders and Contractors (ABC), the industry needs to attract approximately 439,000 new workers in 2025 alone to meet demand.

Wage Pressure: With unemployment in the sector low, construction wages are rising faster than the broader economy, driving up project costs.
Demographics: As older workers retire, the industry is racing to train a younger workforce, placing a premium on firms that can retain experienced supervision.

Global Construction Outlook

New York City remains a top global construction market, though the mix of work is changing. With high interest rates dampening ground-up luxury residential towers, the market is pivoting toward office-to-residential conversions and institutional work (healthcare and education). Global Data reports and other market analyses indicate that while total spending is stabilizing, the complexity of projects, driven by sustainability mandates like Local Law 97, is increasing.

We will continue to follow trends in construction, safety, and monitoring in NYC and the Tri-State area.

For further information on some of these trends, see the following resources: