Data Centers, Health Care and Education Markets Remain Strong with a More Balanced MSI
The 2026 AWCI–FMI report projects a stabilizing construction market with a Membership Sentiment Index of 57.2. While overall construction spending is set to grow at a 5.4% compound annual rate through 2030, the industry faces ongoing headwinds from skilled labor shortages, material tariffs and a high demand for data centers and health-care projects.
The 2026 AWCI–FMI Wall and Ceiling Industry Trends Report takes a critical pulse to empower AWCI members across the entire wall and ceiling supply chain.
The report serves as a strategic planning tool, allowing members across all sectors to adjust their 18-month business plan. This comprehensive study provides objective industry intelligence versus anecdotal information to make informed decisions in the near term.
A total of 197 respondents completed the 2026 survey conducted through July 31 in two phases: AWCI member interviews and an AWCI member survey to assess top concerns, the economy, industry and business environment, segment outlook, business operations and strategic priorities, the competitive landscape, tariff impacts and expectations.
The Power of Data-Driven Strategy
AWCI and the Foundation of the Wall and Ceiling Industry partnered with FMI Consulting to produce the 2026 report, the third annual study to date.
Their mission? To empower members to be more strategic in planning and market responses.
“This report is intended to be much more than an annual snapshot—it establishes a benchmark for measuring where our industry is headed,” said AWCI Foundation President Lee Zaretzky, president, Ronsco Inc., who served on AWCI’s Board of Directors from 2000–2022 and as the current chair of the Foundation and a Foundation board member since 2014.
“Over the next 18 months, I would encourage every contractor to use these findings to pressure-test their own strategic plan,” he said. While the data suggests that confidence has improved, Zaretzky said the market remains cautious.
“Contractors should focus on protecting backlog, strengthening customer relationships, investing in operational efficiency and maintaining pricing discipline rather than assuming rapid market expansion,” he said.
As detailed in the AWCI Foundation’s 2023–2028 Strategic Plan (www.awci.org/wp-content/uploads/2023-28-Foundation-Strategic-Plan-Public-FINAL.pdf) the industry trends study is just one initiative within the Foundation’s four pillars: industry growth, research, endowment and the AWCI CARES grants program (www.awci.org/about/foundation/awci-cares-grants) that provides financial assistance for members.
“Perhaps most importantly, the report reminds us that labor, productivity and collaboration are still the industry’s defining competitive advantages,” said Zaretzky. “Contractors that invest in those areas today will be far better positioned regardless of market conditions.”
The State of the Industry: A More Balanced MSI
The AWCI Membership Sentiment Index (MSI) is a key component of the study that offers a standardized benchmark.
It tracks industry confidence across economic outlook and demand, labor productivity and capacity and cost pressures to help guide members’ decisions on hiring, investment and long-term planning.
“The AWCI Membership Sentiment Index gives us the ability to track confidence and market conditions over time, allowing the Foundation to identify emerging trends much earlier than before,” said Zaretzky.
The 2026 AWCI–FMI Member Sentiment Index (MSI) is 57.2, up from 52.8 in 2025 and 50.7 in 2024. The index remains above 50, indicating modest expansion, while the broader pattern points to a market that is stabilizing rather than accelerating sharply.
“Across the four measures we track—the overall economy, the local economy where members do business, the broader construction market and the wall and ceiling market specifically—roughly half of respondents expect conditions to remain steady, while about one-quarter expect improvement,” said Paul Trombitas, partner and building products sector lead, FMI Consulting’s Strategy Practice.
He said the more important shift from 2025 is that fewer members now expect conditions to deteriorate, providing better visibility for planning even as the market remains selective.
Trombitas characterized the change as stabilization rather than a broad-based recovery.
“The market appears to be finding firmer footing,” he explained. “That does not mean every geography or end market is improving at the same pace, but it does suggest a more stable planning environment than members faced a year ago.”
Growth Sectors and Market Opportunities
The 2026 report shows broad agreement across the value chain on the strongest growth markets. Data centers rank first for contractors, manufacturers and suppliers, health care is consistently second, and logistics/warehousing and K-12 education also rank among the stronger opportunities depending on respondent type.
FMI forecasts total U.S. construction spending to grow at a 5.4% compound annual rate from 2026 through 2030, increasing from approximately $2.2 trillion in 2026 to $2.7 trillion in 2030. Among major segments, power is forecast to grow fastest at 11.7%, followed by conservation and development at 9.6% and office at 8.5%. Multifamily and transportation are each forecast at 6.2%, while manufacturing is forecast at 6.7%.
On the demand side, member expectations align most clearly around data centers and health care. Logistics/warehouse and K-12 also stand out, reinforcing the need for companies to evaluate not simply where construction is growing, but whether their products, relationships and capabilities are positioned for the specific verticals attracting capital.
“Growth is available, but it is highly uneven by segment and geography,” said Trombitas. “The strategic question for members is not whether the overall market grows, but where their specific exposure is positioned and whether they have the capabilities to win there.”
Most major U.S. metropolitan areas are forecast to grow through 2030, with the few projected declines concentrated mainly in Florida. Trombitas noted that construction activity remains concentrated in major markets, while Tier 2 metros are becoming increasingly important sources of growth.
Within the wall and ceiling opportunity set, data centers remain the most pronounced structural growth story. FMI projects data center construction spending to rise from roughly $60 billion in 2026 to about $100 billion by 2030, representing approximately 16% annual growth.
“Data centers are becoming an increasingly important share of the office category and are changing where manufacturers, suppliers and contractors need to build expertise, relationships and capacity,” said Trombitas.
Warehouse construction also remains an important growth subsegment, with FMI projecting spending to increase from roughly $54 billion in 2026 to about $76 billion in 2030, or approximately 8.5% annually.
The implications extend beyond simply selecting faster-growing segments.
“Higher-growth markets generally come with higher capability requirements,” said Trombitas.
“Companies need to deliberately position their products, relationships, service model and delivery capabilities toward the verticals attracting investment rather than assume general market growth will translate automatically into share gains.”
The findings reinforce a central message from FMI: companies can outperform a mediocre market.
Demand has generally held up better than many firms expected. Half of manufacturers and 38% of suppliers report demand running above their 2025 forecasts, even though the broader construction market remains uneven.
Much of that upside is concentrated in data centers, power generation and other large projects rather than broad-based improvement across construction. Companies outperforming the market also point to share gains, service, product availability and customer relationships, underscoring that company-specific execution matters as much as underlying demand.
At the same time, traditional commercial, multifamily and housing activity remain uneven, while interest rates, tariffs, funding constraints and labor availability continue to create headwinds.
Navigating Headwinds: Labor, Costs and Technology
The 2026 study reflects the ongoing critical workforce shortage encompassing the pressing need for skilled trades, field managers and estimators.
As talent availability remains the top concern, which best practices do the report’s findings show members should prioritize—training, culture or recruitment?
“The findings make it clear that it isn’t an either-or decision—it requires all three—but if I had to prioritize, I would start with training and culture,” said Zaretzky. “Recruitment gets people through the front door,” he said. “Training develops skilled professionals. Culture is what keeps them there.”
He emphasized that a vital part of that culture is developing and providing people with the tools to be effective, including keeping up with technology such as artificial intelligence (AI), etc.
“The report shows that successful companies are investing in mentorship, career pathways, cross-training and employee development while creating workplaces where people see long-term opportunities,” said Zaretzky. “Those organizations will have a significant advantage as the labor market continues to tighten.”
“The Foundation has long believed that developing people is one of the best investments our industry can make,” he added. “Technology will continue to evolve, but our industry’s greatest asset will always be skilled, engaged professionals.”
Managing Costs: Escalating Labor, Materials and Tariffs
Current trade policy is creating a higher and more volatile cost environment for AWCI’s members.
Although the temporary 10% global surcharge expired in July, it was replaced by duties of 10% to 12.5% across a broad group of trading partners.
More importantly for the wall and ceiling industry, the 50% tariffs on steel, aluminum and copper remain in place throughout 2027, maintaining pressure on several key material inputs and increasing uncertainty around pricing and procurement.
Member sentiment mirrors this uncertainty rather than alarm: the largest group of respondents describes tariffs as a moderate concern; comparable share reports no significant concern and only a small minority rates them a major concern.
“The economy and cost remain the leading business concerns for manufacturers and suppliers, which reinforces how much uncertainty is still shaping commercial decisions,” said Trombitas.
The study also shows that cost pressure is increasingly intertwined with service and fulfillment requirements as project schedules accelerate and customer expectations change.
“Speed and flexibility are becoming part of the product offering,” said Trombitas. “Winning increasingly depends on the ability to respond, fulfill and deliver—not simply on price and product performance.”
Among manufacturers, 76% say compressed or accelerated project schedules are affecting their products, while 69% cite transportation requirements and regulations and 66% cite changing contractor requirements. Suppliers also point to schedule, transportation and driver-availability pressures.
“The definition of product availability is expanding,” explained Trombitas. “It increasingly means having the ability to deliver material when, where and how the contractor needs it.”
For members, the implication is that managing costs and protecting margins will require closer coordination across manufacturing, distribution and contracting as well as greater attention to logistics, inventory and service execution.
Technology Innovation: Expanding AI Adoption
As AWCI’s President Brian C. Allen notes (www.awci.org/media/presidents-message/ai-and-the-future-of-the-wall-and-ceiling-industry/), AI has become a powerful tool for contractors, giving skilled professionals more time to focus on the work that requires experience, leadership and sound judgment.
The 2026 results suggest that AI adoption is expanding not only in scale, but also in the range and quality of its applications.
AI has moved beyond isolated experimentation and now ranks as the technology expected to have the greatest business impact for contractors, manufacturers and suppliers. Adoption, however, remains concentrated in a relatively narrow set of lower-risk workflows.
The industry is therefore further along in breadth of AI adoption than in depth of operational integration.
“The strongest active use today is in meeting notes, scope review and task management, where 42% of respondents report active use, followed by document drafting and communication at 34%,” explained Trombitas.
More consequential workflows remain earlier in the adoption curve. Only about 16% report actively using AI for estimating, takeoffs or quoting and a similar share for financial analysis or job-cost review, even though 37% and 34%, respectively, are piloting or experimenting with those applications.
The results suggest companies are proving value first in text-oriented and administrative workflows before embedding AI more deeply into core operating processes.
“The next stage will be moving from general-purpose tools toward applications that are integrated into estimating, project management, scheduling, financial analysis, BIM and other core workflows,” said Trombitas. “That is where the potential productivity impact becomes more meaningful, but it also requires stronger processes and controls.”
Getting there will depend as much on organizational readiness and governance as on technology itself.
The 2025 data showed a widening gap in how partners view and understand each other’s challenges, and the gap continues to grow.
“Formal AI governance is still uneven across the value chain,” he said. “Forty-two percent of suppliers report having a formal AI policy, compared with 33% of manufacturers and 21% of contractors, which underscores the need for clearer training and enterprise guidance as adoption expands.”
Closing the Growing Perception Gap
“One of this year’s most interesting findings is that contractors, manufacturers and suppliers all believe they understand one another better than their partners believe they do,” said Zaretzky. “That perception gap is significant because stronger communication leads to better project outcomes. We need to do a better job of bridging that gap.”
The survey quantifies that gap. Ninety percent of manufacturers believe they have at least a moderate understanding of contractor challenges, but only 50% of contractors agree. Suppliers perform somewhat better: 79% believe they understand contractor challenges, compared with 60% of contractors who say suppliers do.
FMI’s analysis suggests the issue is not simply whether manufacturers and suppliers can identify the right challenges. In many cases, they do. The larger opportunity is translating that understanding into actions, communication and service that contractors recognize and value.
“The gap appears to be less about knowing the issues and more about demonstrating that understanding in the way companies engage with their partners,” said Trombitas. “How firms communicate and translate awareness into tangible support may be the greatest opportunity to close the perception gap.”
How to start closing it? Through AWCI, the only organization that houses everything under one umbrella.
“AWCI is uniquely positioned to bridge that divide because we bring the entire industry together under one roof,” Zaretzky emphasized, reinforcing the value of partner alignment for a stronger business ecosystem.
“Through our conventions, committee work, educational programming, technical resources and Foundation research, we create opportunities for contractors, manufacturers and suppliers to have conversations based on facts instead of assumptions,” he said.
The annual trends report also works to close the gap, as the most current gauge identifying and illuminating the realities among the partners.
“This report gives us a common language,” said Zaretzky. “Rather than relying on individual experiences, members can now discuss shared industry data and better understand the challenges each segment is facing. That kind of transparency ultimately strengthens partnerships and benefits the entire industry.”
Why It Matters: Directing Future Research and Resources
As one of many tools the AWCI Foundation produces to serve the industry, the annual trends report helps the Foundation direct future research and educational resources for its membership,
“Going forward, these findings will help shape where we invest our research dollars and educational efforts,” said Zaretzky. “Areas such as workforce development, productivity, technology adoption, supply chain collaboration and leadership development will continue to be priorities because those are the issues members consistently tell us matters most.”
Ultimately, he said the Foundation’s mission is to provide research that helps members make better decisions.
“If this report enables even one contractor to improve their strategy, strengthen a partnership or better prepare for the future, then we’ve accomplished exactly what the Foundation was created to do.”
The report presentation shows the key findings. Once we have the report on the website, we will update this area. CD
Lorelei K. Harloe is a freelance writer in the Washington, DC, area.
