Michael Latas & Associates
Construction Report - July 2026

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​Employment Remains Positive Despite Slower Hiring
The U.S. economy added 172,000 jobs in June, while the unemployment rate remained near 4.3%. Construction hiring continued to expand, although at a more moderate pace than earlier in the year. Industry employment has increased approximately 64,000 jobs (0.8%) over the past 12 months, demonstrating continued demand for skilled labor despite higher interest rates.
Contractors continue reporting that skilled craft labor—including superintendents, project managers, electricians, pipefitters, and HVAC technicians—remains the industry's largest operational constraint.
 
Contractor Backlog Remains Near Multi-Month Highs
Associated Builders and Contractors' latest Construction Backlog Indicator measured 8.8 months, remaining near the highest level seen in almost a year. While contractors remain optimistic, confidence has moderated slightly as developers continue to evaluate financing costs and project timing.
Demand remains strongest in:

• Data centers
• Semiconductor manufacturing
• Healthcare
• Water & wastewater infrastructure
• Utility and transmission projects
• Advanced manufacturing

 
Large Contractor Highlights
EMCOR Group
EMCOR continues to outperform much of the industry after reporting another exceptional quarter earlier this year.
Highlights include:

• Record quarterly revenue
• Record remaining performance obligations (backlog)
• Strong demand from data centers, healthcare and industrial manufacturing
• Continued margin expansion through disciplined project selection

AECOM
AECOM continues to benefit from infrastructure investment and transportation spending.
Recent highlights include:

• Record backlog exceeding $26 billion
• Backlog growth of 8% year-over-year
• Strong Americas design growth
• Raised fiscal 2026 earnings guidance following second-quarter results

 
M&A Activity
Strategic acquisitions remain concentrated in firms specializing in:

• Electrical contracting
• Mission-critical facilities
• Mechanical construction
• Water infrastructure
• Engineering consulting
• Industrial automation

Private equity remains active, although valuation discipline has increased as financing costs remain elevated.
 
Trends to Watch
AI Continues Driving Construction
Few sectors have experienced as much investment as AI infrastructure. Data centers continue generating enormous demand for mechanical, electrical, civil, and utility contractors.
Infrastructure Spending Remains Strong
Federal funding continues supporting transportation, water, airport, and energy projects, providing visibility well into 2027.
Labor Remains Tight
Despite slower overall hiring, contractors continue reporting difficulty finding experienced project managers, estimators, superintendents, and skilled trades.