AGC's Data DIGest: March 23-27, 2026

Why It Matters

Higher energy costs and supply‑chain volatility directly squeeze construction margins, while demographic slowdown curtails the pipeline of new projects, reshaping investment priorities across the sector.

Key Takeaways

• Diesel price spikes 43% amid Middle East conflict
• Private residential construction up 2.3% year‑over‑year
• Data‑center builds rise 31% YoY, offsetting sector decline
• Refrigerated warehouse vacancy hits 20‑year high
• Metro population growth slows, curbing future construction demand

Pulse Analysis

The ongoing conflict in the Middle East has sent shockwaves through global energy markets, pushing diesel to $5.38 per gallon—a 43 % jump from just a month earlier. Executives in oil‑intensive industries warn that even a reopened Strait of Hormuz will not instantly restore supply of crude, fuel, and petrochemical feedstocks, leaving construction firms to grapple with higher material costs and volatile logistics. This price volatility complicates budgeting for large‑scale projects, prompting investors to defer or redesign plans until supply‑chain stability returns.

Despite the macroheadwinds, U.S. construction spending held steady at $2.19 trillion in January, edging up 1.0 % year‑over‑year. Private residential work posted a modest 2.3 % gain, driven by a 13 % surge in home‑improvement projects, while single‑family starts slipped 5.8 %. Non‑residential activity remained mixed: data‑center construction jumped 31 % YoY, offsetting a 2.0 % decline in manufacturing builds that have fallen for a year. Warehouse construction fell 4.6 % YoY, yet Amazon announced a push into rural delivery hubs, and refrigerated‑warehouse vacancy peaked at a 20‑year high of 6.9 %.

Population dynamics are adding another layer of uncertainty. The Census Bureau reports that more than three‑quarters of U.S. metros saw slower growth in the year to June 2025, with the New York‑Jersey corridor losing over 200,000 residents. Declining net international migration is eroding labor pools and dampening demand for new housing, schools, and retail space. While some regions like Jackson, Miss., posted modest gains, the overall slowdown suggests fewer large‑scale public projects and tighter financing conditions ahead. Builders and developers will need to align portfolios with shifting demographics and prioritize adaptable, smaller‑scale projects to sustain profitability.