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 22CornerstoneSpring2026 agchouston.org Steel can swing with global markets, and concrete and other installation-heavy scopes are driven by local capacity and labor,” said Morales. “Electrical and HVAC availability has generally improved versus the worst of the dis- ruption period.” Certain long-lead items — such as transformers, switchgear and large generators — still require early pro- curement to protect the schedule. For Texas, the AGC survey also found that 42% of respondents said they acceler- ated purchases after winning contracts to protect themselves against lead times and price volatility. As for those prices, tariffs have affected a majority of Houston’s firms. Approx- imately 41% of respondents reported they passed most or all tariff costs on to the project owner, but frequent pol- icy changes make it difficult to price long-duration projects with confidence. “Early buyouts, alternates and esca- lation clauses are still part of good risk management,” said Morales. “Strong preconstruction and disciplined change management are the best defenses.” Overall, FMI estimates that construc- tion input prices remain roughly 45% to 55% higher than in 2017, reflecting a post-COVID reset driven by labor, capacity and logistics rather than just tariffs. Critical Factors for Long- Term Development Even with its constraints, Houston’s market has advantages that few regions can match. Population growth remains strong with nearly 200,000 net new residents added in 2024 alone. Major public infrastructure programs, includ- ing a $104 billion TxDOT 10-year plan, provide a long runway for civil and trans- portation work. And, the region’s port, logistics and energy base continue to draw capital. None of that growth is possible, however, without local grid capacity. Power and utility work, upgrading aging systems and adding new generation scope will be key to Houston’s long- term industrial development, from data centers to manufacturing. “The main swing factor is energy prices,” said Morales. “And the big- gest drivers are geopolitics that disrupt supply and energy policy that changes investment confidence and project tim- ing through permitting, regulation and export decisions. Simonson notes that federal policy also matters. “The current administra- tion’s support for natural gas pipelines, liquefaction facilities and export termi- nals benefits Houston’s industrial and energy construction base,” he said. “At the same time, tighter border enforce- ment and reduced immigration could slow population growth and reduce demand for retail, hospitality and enter- tainment facilities.” Turning to Technology To overcome labor and schedule con- straints, contractors are turning to technology. FMI’s research shows the most value being created upstream in planning, permitting, preconstruction and on jobsites is through verification tools that reduce rework. AI-driven model checking, schedule risk analysis, takeoff assistance, docu- ment review and photo-based progress tracking are gaining traction within Houston’s commercial contracting mar- ket. Robotics, too, has gained limited adoption for tasks like layout printing and rebar tying, but widespread deploy- ment remains constrained by integration and reliability concerns. Leadership Versus Legacy Kiley believes another shift is quietly reshaping Houston’s contracting com- munity: The trend of most firms being run as family legacies is declining. Com- plexity, capital intensity and competition have pushed many companies toward formal structures with professional management teams often led by expertly educated CEOs who aren’t part of the founder’s bloodline. “These teams are more diverse, more data-driven and more focused on strategy and culture,” he said. “Now, companies need to decide if they’re a family-first business, or a business-first family. The ones that get that right will pick up mar- ket share in this environment.” The companies positioned to succeed in 2026 are the ones investing in people, processes and long-term relationships.
