EDUCATION • GOVERNMENT • HEALTHCARE/MEDICAL HOSPITALITY • MULTI FAMILY • PROFESSIONAL SPACES RELIGIOUS FACILITIES • RETAIL • TRANSPORTATION • AND MORE! Trusted Partner for Flooring Solutions in Texas Since 1974 Over 50 Years of Excellence (281) 598-6001 | 5510 Brittmoore Rd., Houston, TX 77041 | www.mekfloors.com agchouston.org Spring2026Cornerstone19 That tension between extraordinary demand and constrained capacity will likely be the defining theme of Hous- ton’s 2026 outlook. The money is there, and the projects are there, but what isn’t guaranteed is the workforce, the financing environment or the policies that allow those projects to push from paper to poured concrete. A Growing Market Overall, Texas has delivered more than twice the cumulative construction spending growth of the United States since 2005, and FMI expects the state to continue outpacing the nation through 2029. Within that statewide surge, Hous- ton remains one of the largest and most consistent contributors. Between 2005 and 2024, Houston’s construction volume grew more than 230%, faster than both Texas and the nation. From 2025 through 2029, FMI projects another $350 billion in total put- in-place construction across the metro area, even though the annual growth rate is moderate compared to the post-pan- demic surge. The moderation is important, as this isn’t another speculative bubble. FMI’s Houston forecast shows a market that expands steadily instead of explosively. While residential buildings remain roughly 45% of the total market, nonres- idential buildings account for about 35% and nonbuilding structures comprise about 20% across the forecast period. Within those three categories, manu- facturing alone is expected to account for more than $36 billion in nonresidential building work between 2025 and 2029, making it the single largest commercial building segment in Houston. Office construction, driven mostly by data centers, FMI projects to grow at more than 9% annually, even as traditional speculative office remains soft. Power construction should climb to more than $6.4 billion per year by 2029, spurred by grid upgrades and generation tied to population inflows, industrial growth and data-hungry digital infrastructure. Optimism and Caution Collide Ken Simonson, chief economist for AGC of America, agrees, citing results from AGC of America’s 2026 Construction Hiring and Business Outlook Survey, which polled Texas-based contractors. “Responses showed the most wide- spread optimism was for data centers as 72% expect a higher dollar value of projects available to bid on vs. 19% who expect a lower value, for a net reading of 53 percentage points,” he said. That net reading represents the difference between the percentage of respondents who expect there to be more work to bid on, minus the percentage who expect less than in 2025, for 17 differ- ent project types; the second-highest net reading in Texas, and nationally, was for power projects, closely followed by higher education. Conversely, contractors in Texas expect continued cooling not only in the markets for private office and retail construction, but also for multifamily residential. “They are slightly net pes- simistic about public building, federal agency and lodging construction,” Simonson said. Projects, Not Just Projections These numbers mirror what contractors and developers are already seeing. Major projects in various stages of design or construction include a billion-dollar expansion of the George R. Brown Con- vention Center, a $2 billion multi-phase buildout of ambulatory facilities at the Texas Medical Center, a $600 million Apple AI server manufacturing plant in north Harris County and multiple data centers. Those aren’t one-off jobs, either — they’re massive, multiyear programs that anchor workloads for large portions of Houston’s specialty trade community. “This is a market where scale matters,” Kiley said of how projects are now far more complex and costly than they were a few decades ago. “Instead of tens of millions, we’re talking hundreds of millions or even billions. If you’re an electrical or mechanical contractor and you land one of those big jobs, you’ve got predictable billings and cash flow for years to come.” The flip side, however, is that the more traditional, smaller commercial projects simply don’t seem as plentiful. If a sub- contractor misses out on the big jobs, the In Houston, success in 2026 will depend on discipline, planning and execution.
