Nonresidential construction costs increased slightly in the third quarter of 2026, but underlying market conditions continue to vary by market, trade, and project type, according to Mortenson’s latest Construction Cost Index report.
 
Strong demand in specialized sectors coincides with increased competition across other portions of the U.S. construction market. Costs increased 1.58% on average during the quarter and are 5.60% higher than a year ago across the markets Mortenson tracks.
 
Robust investment in large-scale and infrastructure-intensive projects continues to sustain demand for specialized labor and materials in select markets.

Softer demand across portions of the commercial and institutional market is creating competitive bidding opportunities as trade partners pursue available work.
 
Supply chains remain generally stable compared with recent years, although procurement challenges persist in certain electrical infrastructure categories.

Electrical trades are among the industry’s most constrained resources, while strong demand for electrical systems and metal-intensive scopes has raised costs for materials such as copper, structural steel, and reinforcing material.
 
“Construction costs continue to move higher, but the market is far more nuanced than it was just a few years ago,” said Clark Taylor, vice president of estimating with Mortenson. “We’re seeing steady conditions overall, yet demand associated with large-scale projects continues to create pressure on skilled labor, electrical capacity, and certain material categories. At the same time, increased competition in other segments is creating opportunities for owners who engage early, plan strategically, and remain flexible throughout procurement and construction.”