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Construction spending hits $2.17T in April, but insurers tighten on claims

Gallagher links the uneven construction outlook to a bifurcated insurance market, rising claim severity, and a compressed procurement environment as Infrastructure Investment and Jobs Act funding nears its Sept. 30 expiration.

Reported · Written up by our desk · Industry & Deals

U.S. construction spending reached an annualized rate of $2.17 trillion in April 2026, up from a revised $2.16 trillion in March, but Gallagher says the growth outlook remains uneven by project type amid insurance market strain and labor constraints, according to Risk & Insurance. Gallagher’s mid-year industry update points to stronger activity in public infrastructure, data centers and advanced manufacturing, while office, hospitality and single-family residential construction lagged. The update also describes a compressed procurement environment as federal infrastructure funding under the Infrastructure Investment and Jobs Act nears its Sept. 30 expiration, pushing agencies to accelerate project awards and intensify competition, alongside heightened schedule-related disputes.

On labor and costs, multiple industry groups cited staffing shortages and demographic pressures. More than 80% of contractors reported difficulty filling hourly craft positions, nearly 1 in 5 construction workers are age 55 or older, and Associated Builders and Contractors estimates the industry will need 349,000 new workers in 2026 and 456,000 more in 2027, with construction job openings rising to 259,000 in April from 234,000 in March.

Risk & Insurance also notes that insurers and contractors are operating with higher market pressure as claim dynamics worsen. Gallagher highlights rising claim severity and a bifurcated insurance market, while competition for skilled trades is intensified by the data center boom, including a 64% surge in data center job postings in recent years, and median annual construction pay rising 15% over six years to $66,400 as of June 2025.

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