Michael Latas & Associates
Construction Report - January 2026
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Executive Summary
The U.S. construction industry entered January with mixed momentum. December labor data, released on January 9, showed that construction lost 11,000 jobs in December 2025, and employment was up only 14,000 year over year, signaling a softer finish to 2025 than many contractors had hoped for. ABC also noted that nonresidential construction employment fell by 7,800 in December, with weakness concentrated in nonresidential building and specialty trades. On hiring demand, the January 7 JOLTS-related release showed 292,000 construction job openings at the end of November 2025, up 90,000 month over month and 15,000 above the prior year. Even so, ABC characterized hiring as still historically slow relative to pre-2020 norms, which suggests employers remained selective rather than aggressively expanding payrolls across the board. Backlog held up better than hiring. ABC reported on January 13 that its Construction Backlog Indicator rose to 8.2 months in December, up 0.1 months from November, though still slightly below year-ago levels. The important nuance was segmentation: very large contractors continued to benefit from major data center and megaproject activity, while smaller contractors saw backlog pressure. The broader tone for the month was cautious optimism. ABC said the industry would need to attract 349,000 net new workers in 2026 to meet expected demand, even as contractors contended with labor shortages, immigration pressure, and materials inflation. At the same time, several major players signaled confidence in long-duration infrastructure and building products markets: Holcim acquired Alkern, a French precast concrete maker, and separately said it planned roughly 15 acquisitions in 2026; Heidelberg Materials said defense and infrastructure work should help support 2026 construction demand even if housing stays subdued; and Stantec/AECOM won a $150 million contract tied to the U.S. Navy’s shipyard infrastructure optimization program. What it means: January looked like a market with real project demand but uneven labor follow-through. Large-scale infrastructure, industrial, and data-center-adjacent work continued to support backlog, while smaller firms and more housing-sensitive segments faced a slower environment.
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