The Bonadio Group’s 2026 Construction & Real Estate Industry Study offers a comprehensive look at how contractors, developers, and real estate operators are responding to today’s economic, labor, and operational challenges. Conducted with support from leading construction trade associations, this national survey is designed to help industry leaders benchmark performance, identify emerging risks, and plan strategically for the year ahead.
Below are several key insights and takeaways drawn from the study’s findings.
Profitability Is Strong, But It Is Not Coming Easily
Most companies remain in the black, with 90 percent reporting profitability last year and 95 percent expecting to stay profitable in 2026. The story behind those numbers is more complex. Margins are being protected through discipline rather than expansion. Leaders are tightening overhead, sharpening bids, and managing schedules with greater precision. The firms outperforming today are not necessarily the largest, but they are the ones operating with the strongest internal controls and the most consistent project execution.
Labor Shortages Are Reshaping Strategy, Not Just Staffing
The labor gap continues to define the industry’s limits. Sixty‑seven percent of companies report difficulty finding workers, and the hardest roles to fill are not entry‑level positions. They are leadership and skilled roles that directly influence project outcomes. More than half of respondents identified project managers and supervisors as their toughest hires, which has a direct impact on capacity and profitability.
Sixty‑six percent of companies now run internal training programs, and retention strategies are becoming as important as recruitment. Workforce development has shifted from an HR function to a core strategic priority.
Backlog Is Stable, But Confidence Has a Shorter Shelf Life
Backlog levels remain healthy overall, although long‑term visibility is tightening. Many firms report stable or increasing pipelines, yet fewer have clarity beyond the next 12 months. Owners are more cautious, financing is more expensive, and project timelines continue to shift. Contractors are responding by becoming more selective, more strategic, and more focused on protecting margin rather than chasing volume.
Technology Adoption Is Accelerating
More than half of companies have adopted new technology in the past two years, and the most visible changes are happening on the jobsite. Digital field reporting, mobile time tracking, GPS‑enabled equipment, and safety technology are becoming standard tools for improving productivity and reducing risk.
AI adoption remains early but is gaining momentum. Eleven percent of companies already use AI tools and another 18 percent are piloting them. The industry is beginning to explore how automation, forecasting, and data analysis can support better decision‑making. The companies leaning into technology are not chasing trends. They are building resilience and reducing friction across the project lifecycle.
Interest Rates & Tariffs Are Quietly Squeezing Margins
Profitability remains strong, although cost pressures are increasingly influential. One in five companies report that interest rates have reduced margins, and nearly half cite material cost increases tied to tariffs. These pressures are shaping decisions about equipment purchases, expansion plans, and long‑term capital investments. Liquidity and cash flow forecasting are becoming central to strategic planning rather than routine financial maintenance.
Market Mix Is More Balanced Than Ever
The industry is not leaning heavily toward public or private work. It is actually pretty evenly split. Roughly one‑third of respondents operate primarily in public markets, another third in private markets, and the remainder maintain a balanced mix. Only a small share reported meaningful shifts in their project mix over the past two years. Flexibility remains a competitive advantage as economic conditions continue to evolve.
The Big Picture: 2026 Rewards Focus, Flexibility, & Operational Strength
The Construction & Real Estate industry is profitable, active, and full of opportunity, although the path forward requires sharper execution and smarter strategy. In times of uncertainty, growth tends to favor organizations that stay adaptable, make smart financial decisions, and continue investing in both their people and technology.
For a deeper dive into the data, trends, and strategic recommendations shaping the year, readers can explore the full 2026 Construction & Real Estate Industry Study. If you would like to discuss any of these findings or explore what they mean for your organization, our experts are ready to help. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
