2026 INDUSTRY OUTLOOK


AGC of California Survey Reveals Industry Outlook for 2026


T


he AGC of California has released findings from its 2026 membership survey, offering a snapshot of contractor sentiment statewide. Results indicate contractors are


entering the year with measured confidence. While overall demand expectations remain steady compared to last year, projections for revenue growth, hiring and profitability have moderated slightly, reflecting cautious optimism across California’s construction industry. Nearly 62% of respondents anticipate growth or a moderate


increase in overall construction activity in 2026, and another 17% expect activity to remain strong or expand further. In total, almost four out of five contractors foresee sustained demand statewide. Confidence at the company level remains high. Eighty-


one percent of contractors expressed confidence in their firm’s performance this year, with most projecting slight to moderate revenue gains. About 52% plan to increase hiring to meet project demand, even as skilled labor shortages persist. Profit expectations are also generally positive: 54% forecast net profit growth, while 25% expect stable performance despite continued margin pressures. Outlook varies across market segments. Contractors in highway/transportation and utility/infrastructure sectors


BY TERESA KENT


report steadier expectations tied to public-sector funding and essential infrastructure investment. Sixty-six percent of highway/transportation firms and 69% of utility/infrastructure firms anticipate strong or moderate activity in 2026. Revenue expectations are more mixed in these sectors, though work- force needs remain high, with more than half of highway/ transportation firms and 72% of utility/infrastructure firms planning to hire. Building-focused firms report comparatively stronger activity


expectations, with nearly 80% anticipating solid market condi- tions. However, revenue growth projections remain moderate, and 69% plan to expand their workforce, signaling careful growth strategies influenced by private-market conditions. Despite positive indicators, contractors continue to face


challenges. Sixty-six percent cited demand for skilled labor as a primary concern, underscoring the need for stronger work- force pipeline development. Regulatory compliance remains a concern for 58% of firms, while rising wages and employee benefit costs pressure 45% of respondents. Overall, the findings suggest California’s construction


industry is preparing for steady demand in 2026 while navi- gating workforce shortages, regulatory hurdles, and ongoing cost pressures.


ECONOMIC OUTLOOK AND INDUSTRY EXPANSION More than


of contractors are optimistic that their revenue and net


79% same or increase in 2026. 78% 34


of contractors believe that construction will expand or stay the same in 2026.


CALIFORNIA CONSTRUCTOR MARCH/APRIL 2026


80%


of contractors are optimistic about their company’s success in 2026.


TOP CONCERNS FOR 2026


•Workforce pipeline development


•Regulatory requirements


•Unreliable infrastructure investment


More than


of contractors project hiring will stay the same or increase in 2026 compared to 2025.


83% Read more survey results


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