A new first-quarter outlook from FMI Corp., a construction-based consulting firm, signals a transitional year ahead for North American construction, with modest topline growth masking sharp divergence across sectors that directly affects wall and ceiling contractors’ backlog, bidding strategy and labor planning.

Total U.S. construction put in place is projected to decline 1 percent in 2025 before rebounding a percent in 2026 to approximately $2.2 trillion. The recovery is not broad-based. Strength in infrastructure and data center construction is expected to offset continued softness in key building segments, including multifamily, lodging, commercial office and certain manufacturing categories, markets that traditionally drive demand for gypsum board assemblies, acoustical ceilings and interior finish systems.

For interior trades, this uneven mix translates into selective opportunity rather than cyclical lift. Data center work, while expanding, often involves specialized assemblies, higher-performance fire-rated and impact-resistant gypsum systems, and tighter tolerances for ceiling plenums and mechanical coordination. These projects also tend to favor contractors with experience in high-security environments and prefabrication capabilities.

Meanwhile, continued weakness in multifamily and office construction presents downside risk for contractors heavily exposed to high-volume drywall and suspended ceiling installations. Reduced starts in these sectors can compress margins, intensify competition and shift work toward renovation and repositioning projects, where sequencing constraints and existing conditions introduce productivity challenges.

FMI identifies five strategic priorities for contractors navigating 2026:

• Investment in workforce development and leadership pipelines
• Adoption of disciplined operating systems and data tracking
• Strengthening supply chain resilience
• Accelerating use of AI, automation and digital tools
• Targeting specific sectors and geographies with proven demand drivers

For wall and ceiling professionals, these priorities have direct field implications. Digital tools and AI-driven estimating can improve takeoff accuracy for complex assemblies, while supply chain resilience is critical as specialty board products, grid systems and insulation components remain susceptible to lead-time variability.

Regional and sector-specific targeting will be particularly important. Contractors aligned with infrastructure-adjacent work, such as transportation hubs, institutional buildings or energy projects, may see more consistent demand for interior systems compared to those reliant on speculative commercial development.

The report underscores a broader shift: success in 2026 will depend less on overall market growth and more on precise positioning. Contractors that align crews, material procurement and installation practices with high-performing segments will be better equipped to maintain backlog and protect margins in a fragmented market cycle.