RALEIGH, N.C. — As North Carolina’s construction industry faces both headwinds and opportunities, contractors are looking for clear strategies to expand, diversify, and win new market share amid shifting economic trends.
To help builders, trade contractors, and owners tackle these challenges, Ward and Smith recently hosted its annual Construction Conference, featuring a deep-dive presentation from Stahler McKinney, a principal at FMI Consulting specializing in guiding construction leaders through complex market expansions.
When news breaks about a region booming with new projects, construction leaders naturally see opportunity. But according to McKinney, the path to profitable expansion is rarely as simple as following the buzz.
“People often underestimate the challenges that come from moving into a new market,” McKinney cautioned. “It’s important to understand that what makes you successful in one area may not work in a new market.”
McKinney emphasized the need for thoughtful market research and planning timelines that consider immediate demand, medium-term positioning, and long-term transformation.
“In the near term, it’s critical to respond and adapt to the demand that’s coming. The medium term is all about positioning your business for future contracts by diversifying your services and selecting the right market for expansion, while the long-term entails predicting fundamental changes,” McKinney explained.
A flattening national construction spend, squeezed by rising labor and material costs, means future projects will demand sharper competitive edges.
“If you want to grow your business, you’re going to have to compete for those dollars and take share,” said McKinney. “To access a new market, you’ll have to carve out your own space in those markets, figure out what sets you apart and differentiate yourself for success over the long term.”
In North Carolina, the residential market remains strong, with multifamily housing down slightly due to high interest rates but expected to rebound. Meanwhile, commercial, industrial, and institutional spending will likely hold steady or see only modest growth.
Construction leaders should zoom in on sub-segments within broad markets. McKinney reminded attendees:
“Bull and bear markets coexist at all times. Your perspective in terms of how busy you are will vary significantly based on the segments where you do business.”
He pointed to data centers as a prime example. Despite general softening in the office sector, data center builds in North Carolina have skyrocketed — 15 times more than a decade ago — driven by booming tech, AI, and cloud needs.
Growth is also expected in lodging, power, transportation, and education, while religious, public safety, and manufacturing segments may see pullbacks.
According to McKinney’s outlook, the Raleigh-Durham-Chapel Hill region, Charlotte, Greensboro, Wilmington, and New Bern lead the pack for growth over the next five years. Slower metros include Winston-Salem, Hickory, Burlington, and Fayetteville.
McKinney outlined three proven strategies for construction firms to diversify:
Before leaping into a new location, McKinney urges leaders to ask tough questions: Does local demand truly justify the move? Do you know your competitors and your own differentiator? Can you commit the resources — capital, time, people — to win work and deliver it profitably?
“It is certainly understandable to want to tap into a growing market,” said McKinney, “but there are some common mistakes that can get you into trouble, and you need to assess what your motivations are before moving forward.”
Acquisitions are one path to break into new markets, but McKinney warned they come with risks. Leaders must evaluate whether buying another firm will truly add value — and factor in the time needed to integrate new teams and cultures.
Expanding in construction is about more than chasing headlines — it’s about asking the right questions, doing the research, and building a plan that considers near-term wins and long-term resilience.
“We like to say there is no such thing as an underserved market,” McKinney emphasized. “There’s always going to be people who are already entrenched, so you really have to consider how you will differentiate yourself from the competition.”
For firms ready to get serious about diversification and sustainable growth, Stahler McKinney invites industry leaders to reach out: stahler.mckinney@fmicorp.com
Originally reported by Ward and Smith.
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