Construction cost escalation across North America continued at a moderate pace during the second quarter of 2026, providing owners and developers with more predictable budgeting conditions as large-scale project pipelines advance. Rider Levett Bucknall reported that steady pricing trends and a growing construction backlog are supporting continued activity in commercial and institutional building sectors.
The consulting and project management firm said the North American construction backlog reached 8.8 months during the quarter, reflecting sustained demand tied to data center construction, infrastructure programs, healthcare developments and education projects.
Rider Levett Bucknall's quarterly cost analysis showed that construction pricing continued to vary significantly by market. Honolulu, Phoenix and Miami recorded some of the strongest annual cost increases among major metropolitan areas, while markets such as Chicago, Dallas and Washington maintained more moderate escalation levels.
The report characterized current pricing conditions as relatively stable compared with the volatility experienced during earlier supply chain disruptions and labor shortages. The firm indicated that national averages continue to mask substantial regional differences in procurement conditions, labor availability and project demand.
In Canada, nonresidential construction investment remained active across several provinces. Alberta's energy-related construction activity continued to support project demand, while Ontario infrastructure spending increased through public-sector programs, including work tied to the Darlington Small Modular Reactor development.
According to the report, current project budget pressures are being driven more by transportation and fuel costs than by widespread shortages of labor or core construction materials. Global shipping route adjustments linked to Middle East conflicts contributed to higher logistics expenses during the quarter.
Rider Levett Bucknall stated that developers and owners are increasingly relying on localized market data and early procurement planning to manage cost exposure. The report also noted that flexible budgeting strategies and detailed project controls are becoming more important as regional market conditions diverge.
Contractor confidence levels remained positive across multiple market sectors despite transportation-related uncertainty, supported by the existing volume of planned and active construction work.
Data center construction remained a major contributor to backlog growth during the quarter, reflecting continued investment in digital infrastructure projects across North America. Infrastructure programs, healthcare expansion and institutional construction also continued to generate opportunities for contractors and specialty trades.
The report suggests that stable quarterly escalation levels could improve cost forecasting for owners pursuing long-term capital programs. However, regional differences in labor conditions, logistics costs and procurement timing are expected to remain key considerations for project planning and delivery.
For contractors and developers, the combination of sustained backlog levels and moderate cost escalation may support continued bidding activity through the second half of 2026, particularly in sectors tied to technology infrastructure and public investment programs.
Source: Globe News Wire.
