Nonresidential building construction spending in this country fell seven percent through the first five months of this year, measured against the same period in 2025. Over roughly the same twelve months, the producer price index for the materials that go into those buildings rose 7.1 percent. Both numbers are accurate, they point in opposite directions, and together they explain why so many of the owners we talk with have quietly stopped trusting their own read on timing. Fewer projects are getting built, and the ones that do get built cost more than they would have a year ago. If you are a pastor with a building committee, a developer holding a parcel, or a business owner staring at a lease renewal, the question is simple to ask and harder to answer: is now a good time to build?

The honest answer starts with a correction. “The market” is no longer a single thing you can be early or late to. In July, the American Institute of Architects revised its 2026 spending forecast from a one percent gain down to a three tenths of a percent decline, and the report describing that revision used a particular word for the shape of the market: K-shaped. Some categories are climbing steeply, others are falling hard, and the average between them describes almost nobody’s actual project. The useful question is not whether this is a good year to build in general. It is what is happening in the specific slice of the market your project will have to compete in for labor, materials, and a good contractor’s attention.

Two markets wearing one name

At the top of the K sits an enormous amount of money that has very little to do with most of our clients. Data center construction is forecast to grow 33 percent this year and another 25 percent next year, and by 2027 data centers will account for roughly eight percent of all nonresidential building spending in the United States. Health care construction is advancing steadily behind an aging population. Amusement and recreation, a category that includes arenas and performance venues, is up more than seven percent. Hotels, which matter directly to several of the audiences we serve, are forecast to rise 4.6 percent this year and 5.2 percent next, as operators bet that renovated rooms will win a larger share of a competitive travel market.

At the bottom of the K are the sectors in genuine retreat. Traditional office construction, with data centers stripped out of the number, is expected to decline another five percent this year and again next year. Warehouse construction has fallen 31 percent from its 2023 peak. Manufacturing, flush with federal money two years ago, is off 11.6 percent in 2026. Institutional construction, which is where most church, school, and nonprofit work lives, is doing something less dramatic and far more useful for planning purposes: it is growing slowly and steadily, up 2.8 percent this year with a similar gain projected for next. That quiet stability is easy to miss when the headlines describe the market as weak.

What the K shape means in practice is that your competition for a builder is regional and trade specific rather than national. A congregation in southwest Missouri is not bidding against a data center campus for its carpenters or its drywall crews, but it may well be bidding against one for its electrical contractor, its switchgear, and its service transformer. We have written before about how long lead times on electrical equipment can hold up an otherwise ready building, and the reason that problem persists in a slow market is that the categories consuming electrical capacity are precisely the ones still growing. Meanwhile the trades tied to offices and warehouses have real availability. The same project can face a crowded market in one division of the work and an empty one in another, which is why a single answer about market conditions is almost always wrong.

Why prices climb while demand falls

Ordinarily, falling demand cools prices. That is not what is happening this year, because the pressure on construction costs is coming from the supply side rather than the demand side. Tariffs on metals have pushed the producer price index for aluminum mill shapes up 40 percent year over year, steel mill products up 22 percent, and copper and brass mill shapes up 18 percent. Fuel has compounded the effect: diesel is up 44 percent and liquid asphalt 45 percent, which raises the cost of every delivery, every hour of excavation, and every paved surface on the site. Lumber and plywood, up 9.9 percent, is the mild story in that group.

Energy prices deserve particular attention because their effect arrives late. AIA’s economists note that historically a ten percent year over year increase in the price of Brent crude has produced an additional four to five percent increase in construction material prices roughly three months later. Oil prices climbed steeply through the spring on a year over year basis before easing as geopolitical tension cooled. The arithmetic of that lag means that some of the material cost increases already in motion have not yet shown up in bids. An estimate prepared in the spring and a bid received in the fall are not describing the same building at the same price, and an owner who treats them as interchangeable is going to be unpleasantly surprised.

What a good time to build actually looks like

When an owner asks us whether now is a good time to build, the question usually carries an assumption worth examining: that somewhere ahead there is a moment when costs settle, financing loosens, and the decision becomes obvious. That moment does not announce itself, and the people waiting for it have been waiting a long time. The AIA billings index, which leads nonresidential construction spending by roughly nine to twelve months, has sat below the breakeven line for nearly three and a half years, the longest such stretch in the history of the measure. A market that has been soft for that long is not a temporary condition to be outlasted. It is simply the environment in which projects now get built.

What determines whether this is a good time to build has less to do with the market than with your own organization. Is the funding in hand or committed, or is it a campaign that has not launched? Is the program defined well enough that the drawings will describe one building rather than three unresolved arguments? Does the site have utility capacity, and do you know that rather than assume it? Have the entitlements been tested with the jurisdiction that will actually issue the permit? An organization that can answer those questions is in an unusually strong position in a soft market, because contractors bidding a well documented project with a real funding source will compete hard to win it. The market does not decide whether you should build. It decides how much competition you get when you ask.

That competition is genuinely available right now for owners who are ready to use it. One architect in the West told AIA’s July survey panel that a small renovation on a difficult site had drawn ten bidders, and that they could not recall work of every scale and type stopping so abruptly in nearly forty years. Ten bidders on a small renovation is a buyer’s market by any reasonable definition. It also concentrates the risk we described in an earlier post, because a crowded bid table almost always produces at least one number that is low for the wrong reasons. Softness rewards owners who bid carefully against complete documents and quietly punishes owners who simply take the bottom line and sign.

The price of waiting

Waiting is a decision with a cost, and that cost is almost never priced. At the current rate of input escalation, a four million dollar project deferred by a year is roughly a quarter of a million dollars more expensive before a single design decision changes. Building codes move on three year cycles, so a document set that sits long enough needs real rework rather than a new date on the cover sheet. Church and nonprofit clients carry an additional cost that appears in no index at all, which is campaign momentum. A congregation that voted on a building two years ago and has still not seen dirt move is a harder congregation to ask a second time, and the second ask is usually for a larger number.

None of this is an argument for building when you are not ready. It is an argument for being honest about what you are actually waiting for. If you are waiting for a specific, nameable event, the close of a capital campaign, the resolution of a lease, the closing on a parcel, then you have a plan, and the design and due diligence work that can run in parallel should be running now rather than after the event. If you are waiting for the market to feel better, you are waiting for something the available data does not promise. Forecasters do expect roughly three percent spending growth in 2027, which is better than this year, but growth in construction spending is not the same thing as lower prices, and it usually arrives alongside more competition for the same crews.

Sorting through all of this is not market forecasting, it is project judgment, and it belongs at the very front of a project rather than after the drawings are underway. When an owner brings us a decision like this, our first work is to determine which arm of the K their project actually sits in, which trades and materials will be contested in their region and on their schedule, and whether the organization is ready to put a complete, well documented project in front of contractors who currently have room in their calendars. Twenty five years and more than a thousand projects give us a fairly reliable sense of when an owner is genuinely ready and when the market is being blamed for something closer to home. If you are weighing whether to move now or wait, we would be glad to work through the specifics of your project with you, with no expectation beyond a useful conversation.