USG Corporation highlighted key construction market trends and workforce priorities during remarks at the BUILD26 convention in New Orleans, reinforcing the importance of adaptability and collaboration across the wall and ceiling industry.

Speaking during the AWCI leadership session on March 17, John Pappas addressed contractors, manufacturers and suppliers as part of the presidential portrait presentation and keynote introduction. USG also sponsored the event’s keynote speaker, Kevin Brown, an author and organizational culture expert.

Pappas emphasized the role of industry alignment in maintaining project execution and business stability amid changing market conditions. He noted that collaboration across contractors, manufacturers, distributors and suppliers remains essential to delivering consistent performance in wall and ceiling assemblies, particularly as project pipelines shift.

Residential construction has softened, with housing starts declining in 2025 due to elevated mortgage rates, ongoing material cost pressures and labor constraints. For wall and ceiling contractors, this slowdown affects demand for gypsum board installation, finishing and related scopes, increasing competition and tightening margins across residential work.

Nonresidential construction has also experienced headwinds in certain segments, driven by economic uncertainty and tighter financing conditions. These factors are contributing to slower project starts and extended timelines, requiring contractors to manage risk more closely during preconstruction and execution phases.

At the same time, Pappas pointed to areas of growth that are reshaping demand for interior systems. Data center construction continues to expand rapidly, driven by increased investment in digital infrastructure. These projects require complex interior assemblies, including fire-resistance-rated partitions, shaft wall systems and acoustical ceiling installations that must meet stringent performance and coordination requirements.

“This is a pivotal time for our industry,” Pappas said during the remarks, noting that shifting demand patterns are creating both challenges and opportunities for contractors. He emphasized that firms capable of adapting to new project types and maintaining high installation standards will be best positioned to succeed.

Labor availability remains a key consideration, though the industry has shown resilience. Many contractors continue to hire and retain skilled workers, reflecting an ability to pivot toward active market segments. Maintaining a trained workforce capable of executing a range of wall and ceiling systems remains critical to meeting project demands.

Pappas also cited external factors, including tariffs and changes in international trade, as potential disruptors to material supply chains. These pressures could affect pricing and availability of key components such as steel framing, gypsum products and ceiling systems, underscoring the need for proactive procurement and coordination.To illustrate the importance of collaboration under pressure, Pappas referenced the response to the 2024 Francis Scott Key Bridge collapse. The coordinated effort among public agencies and private-sector partners demonstrated how complex challenges can be addressed through alignment and rapid decision-making.

USG’s sponsorship of the BUILD26 keynote underscores its ongoing commitment to supporting the wall and ceiling industry through education, leadership and partnership. Brown’s keynote presentation focused on organizational excellence and customer loyalty, reinforcing the importance of culture and accountability in driving long-term performance.Pappas concluded by emphasizing that while uncertainty remains, the construction market continues to present opportunities for growth. By working together and maintaining a focus on quality, safety and innovation, industry stakeholders can navigate current challenges and position for future success.