By Charlie Haas, AIA, Director of Preconstruction

The Midwest construction market remains resilient, but growth is becoming increasingly concentrated in data centers, AI, utilities, healthcare, education, and infrastructure. CG Schmidt’s latest Construction Outlook highlights the market trends shaping the region, from labor shortages and skilled trade competition to ongoing financing and economic pressures.

While existing backlogs are expected to sustain construction activity through 2026, softer architectural billings and design activity point to a more cautious and competitive 2027. In this evolving market, early planning, proactive procurement, reliable funding, and strategic risk management will be critical to project success.

Midwest: Resilient Growth in a Shifting Market

In the Midwest, the market remains fundamentally healthy, but growth is increasingly concentrated in high-demand sectors while labor constraints and softer leading indicators create a more cautious outlook:

Concentrated Growth: Data centers, AI infrastructure, utilities, healthcare, education, and public infrastructure continue to drive demand, providing strong market support even as office, retail, and speculative commercial development face ongoing financing and economic headwinds.

Labor Constraints: Workforce availability remains the industry’s defining challenge, with intense competition for electrical, mechanical, concrete, and civil trades as major projects compete for skilled workers. Early workforce planning and contractor capacity are becoming critical to project success.

Proactive Risk Management: With material pricing remaining mixed, design activity softening, and the market expected to become more competitive in 2027, successful projects will depend on early planning, budget validation, proactive procurement, reliable funding, and strategic risk management.

Looking Ahead

The Midwest enters 2027 with a strong foundation, but the market is shifting toward more selective growth. Continued investment in data centers, AI, utilities, healthcare, education, and infrastructure will sustain demand, while softer design activity and persistent labor constraints point to a more competitive environment.

For project teams, success will depend on planning and securing the resources needed to deliver. Early budget validation, reliable funding, workforce planning, proactive procurement, and disciplined risk management will be key to navigating the opportunities and challenges ahead.