Carolinas Contractors Anticipate Growth Opportunities Ahead
Contractors in the Carolinas are experiencing a wave of cautious optimism entering the New Year. Positive signs are especially evident in the healthcare, power, water/sewer, and data center sectors. Despite broader national uncertainties, businesses in North Carolina and South Carolina have noted strong market momentum, particularly regarding their backlogs and workforce growth plans.
Dave Simpson, President and CEO of Carolinas AGC, highlights, "While contractors across the country are facing real uncertainty, the outlook from our members in North and South Carolina shows clear areas of strength. Our continuing work in healthcare, power, and water sectors is sparking significant opportunities. With backlogs holding steady and firms planning to hire, the construction industry remains a key driver for regional economic growth. However, challenges such as workforce shortages and rising costs must be confronted, emphasizing the importance of advocacy and strategic investments in infrastructure in the upcoming year."
North Carolina: Positive Trends in Healthcare and Power
In North Carolina, contractors demonstrate high confidence in the state's construction prospects. The optimism largely centers on healthcare, data centers, and power-related projects.
Jim Rhodes, Senior Vice President at Wayne Brothers Companies, notes, "We are noticing robust opportunities in data centers, energy, manufacturing, and institutional work across North and South Carolina. This diversification is crucial for sustaining the health of our industry and fostering progress during fluctuating market conditions."
Key insights from North Carolina's contractors include:
- Other healthcare facilities, including clinics and testing centers, have a 67% net positive outlook, indicating a strong expectation for growth.
- Data centers and power projects are also seen positively, each holding a 50% net positive expectation, reflecting their sturdy market position.
- Contractors are optimistic regarding water/sewer construction (38%), hospitals (36%), multifamily residential projects (36%), and K–12 schools (33%).
Confidence remains high among North Carolina firms, with 55% expressing that they are very confident or confident in their project backlogs and bidding pipelines. Notably, 48% of contractors reported larger backlogs than last year, and 76% anticipate increasing their workforce in 2026.
However, workforce challenges persist, as evidenced by over 90% of respondents saying they struggle to fill skilled craft and salaried positions, underscoring the significance of workforce development and effective recruitment strategies.
South Carolina: Growing Energy in Hospital and Public Sector Construction
Contractors in South Carolina are equally optimistic, particularly in markets such as hospitals, K-12 schools, and data centers. This optimism stands out, surpassing several regional averages.
- Hospital construction leads the market with a strong 70% net positive outlook, indicating significant confidence.
- Data centers are not far behind, posting a 67% positive reading, with other healthcare facilities also at a solid 60%.
- Public buildings and higher education institutions are showing a promising 56% net positive expectation, indicative of sustained demand.
Similar to their northern counterpart, around 60% of contractors in South Carolina express confidence in their backlog and bidding prospects, with 70% planning an increase in workforce for 2026.
Labor pressures are kin to those in North Carolina, with 76% of firms reporting challenges in filling craft positions and a staggering 95% struggling to fill salaried positions, alongside rising costs for labor which pose substantial concerns as they prepare for 2026.
Rhodes emphasizes the core importance of workforce, stating, "To sustainably grow our industry, it hinges on our people. Our capability to deliver projects efficiently and appreciate those contributing will ultimately dictate our success."
Southern Region Trends: Carolinas Lead in Key Markets
Within a broader southern context, the strongest growth expectations focus on data centers (60% net positive), hospitals (33%), power (32%), and water/sewer (28%). However, the retail and private office sectors show negative trends, indicating a shift in market dynamics.
Notably, contractors in both Carolinas have surpassed regional averages concerning optimism in healthcare, power, and data center projects, reinforcing their strong market position in these sectors.
Across the Southern region, approximately 71% of contractors indicate plans to boost staffing levels, even amidst ongoing concerns around workforce shortages, rising labor costs, and a prevalent economic uncertainty.
Contrasting Regional and National Outlooks
The national scene, as observed by AGC, reveals softened expectations among contractors, with notable exceptions found in data centers and power sectors. The challenges posed by economic uncertainties, financing costs, tariffs, and workforce shortages continue to cloud contractors’ outlooks nationwide.
In this context, the Carolinas showcase a distinctive strength. Contractors from both states report confidence in healthcare, institutional markets, and utility-related work, alongside solid backlogs and persistent hiring intentions.
Despite these challenges, a significant number of companies in the Carolinas have aspirations for growth in 2026. This reinforces the continued demand for construction services, highlighting the critical role of initiatives from Carolinas AGC in supporting the industry going forward.
Frequently Asked Questions
What sectors are seeing growth in the Carolinas?
Healthcare, data centers, and power-related construction are leading growth sectors in the Carolinas.
How confident are contractors in North Carolina?
Approximately 55% of contractors in North Carolina express confidence in their backlog and bidding pipeline.
What challenges do contractors face in South Carolina?
Contractors in South Carolina face significant labor challenges, with a high percentage struggling to fill craft and salaried positions.
How do Carolinas contractors compare to those in the broader Southern region?
Carolinas contractors tend to outperform the Southern region average in key markets like healthcare and data centers.
What is the overall outlook for the construction industry in the Carolinas?
The outlook remains optimistic, with many firms planning to grow despite facing workforce and cost challenges.
