JLL’s Project and Development Services group predicts a construction industry in 2026 defined by policy-driven pressures, local-market nuance and the need for sharper strategic planning. And this evolving construction market will have a significant impact on new development activity in the industrial sector.
That’s the key takeaway from Jll’s 2026 U.S. Construction Perspective, a report released this November that highlights how shifting federal and economic policies are reshaping construction opportunities across the country.
“The construction industry is navigating an unprecedented convergence of policy impacts that are fundamentally reshaping market dynamics,” said Louis Molinini, head of project and development Services for the Americas at JLL, in a statement. “While much of 2025 was at a standstill due to uncertainty, we now have directional clarity that enables strategic positioning for organizations ready to move beyond reactive approaches.”
That uncertainty has slowed new development in all sectors, including industrial. Construction spending dropped 4.7% in 2025, JLL reported, as developers and investors paused projects amid fluctuating costs, regulatory debates and inconsistent demand.
For 2026, JLL expects a modest rebound of just 0.4% growth in new commercial construction activity. This suggests that construction firms will continue to face tight margins and operational pressures, even as activity begins to stabilize.
Much of that strain will come from rising material costs. According to the report, policy instability and a slowdown in overall building activity delayed the full impact of trade and supply-chain pressures. As projects ramp back up in 2026, JLL anticipates that cost increases will accelerate, making early budgeting and procurement strategies even more important.
Workforce challenges are also expected to add stress to construction companies. The industry’s labor shortages, long masked by reduced demand, could increase as construction starts rise. The presidential administration’s immigration policies are also reducing the pipeline of labor available to work on new developments, creating staffing bottlenecks that could slow project timelines and push labor costs higher.
“Success in 2026 will require big-picture thinking with granular attention to local market details,” said Jaymie Gelino, chief operating officer and head of work dynamics accounts with JLL’s Project and Development Services group, in a statement.
Gelino said that regional differences in construction activity and demand are widening.
“Even markets facing bigger impacts from ongoing uncertainty remain viable for projects that are matched to local conditions and risks,” she added.
Gateway markets illustrate that tension. Their diverse populations, reliance on immigrant labor and deep global ties make them more vulnerable to policy shifts. But these same attributes also strengthen their long-term prospects.
These major metros boast robust infrastructure, deep talent pools and broad capital access, advantages that can outweigh short-term disruptions. According to JLL, organizations can mitigate risks through early contractor involvement, flexible risk-sharing models and procurement strategies tailored to local conditions.
“Planning for future activity must account for structural workforce constraints now, as market challenges may compound when construction activity accelerates,” said Andrew Volz, research manager with JLL’s Project and Development Services team, in a statement. “The intersection of trade policy, immigration enforcement and local economic conditions requires a wholly integrated approach to accurately assess risks.”
