Key Takeaways
- The South is set to contribute more to 2027 non-residential construction growth than any other region, across data centers, power and public civil work, while the West and Midwest pull back in some categories.
- Labor strain follows the work. Data center and power projects draw on electricians, mechanical contractors and pipefitters, the trades with the smallest pools, and the report finds the South carrying the heaviest workload per worker by 2028.
- JLL forecasts U.S. tender prices will grow 3.1% to 4.2% in 2027, above the pre-2020 norm of 2% to 3%, and contractors are building elevated costs into their bids.
CHICAGO, Nov. 12, 2026 – The South is set to lead U.S. construction growth in 2027, and it’s also where the workforce is stretched thinnest, according to JLL’s 2027 U.S. Construction Perspective report. Costs are still climbing alongside that demand. JLL forecasts U.S. tender prices, the prices contractors bid for projects, will grow 3.1% to 4.2% in 2027, above the pre-2020 norm of 2% to 3%.
Nationally, growth is concentrating in data centers, power and public civil work, and it’s broadening from there, but the South is where that shows up most. The region is contributing more to 2027 non-residential growth than any other, with data centers, power and public civil work all adding to it. The Northeast is expected to see more modest gains, led by power and public civil work. In the West and Midwest, some of those categories are expected to pull back.
“The South is where the pipeline is, and it’s also where the trades are hardest to find,” said Jaymie Gelino, Global Head of Work Dynamic Accounts and Operations. “Data center and power projects need electricians, mechanical contractors and pipefitters, and those workers are locally credentialed and tied to specific projects, so they don’t move to where the work is. Where those projects cluster, they set the price of capacity for everyone else.”
The report’s workload measure, which tracks real non-residential construction per non-residential worker, shows the same shift. The South ends the forecast period in 2028 with the heaviest load of any region, while the West and Midwest ease. Pipelines are growing fastest where the available workforce isn’t. Where labor is tight, projects take longer, which adds to upfront costs and leaves them more exposed to price increases.
A soft local market doesn’t guarantee soft pricing. Projects outside the growth sectors may find contractors available, but only if they don’t need the same trades as the work absorbing them.
The forecast ranges for the four U.S. regions JLL tracks (Northeast, South, Midwest and West) sit close together, and every region reaches above the pre-2020 norm, but the forces behind them differ. A slower pace still adds to a cost base that jumped in 2021 and 2022 and hasn’t come back down. For capital planning, the question is no longer when costs will fall, but how fast they’ll keep rising and where. The U.S. forecast sits inside the 3% to 6% annual range JLL set out in its Global Construction Costs Index 2026.
Heading into 2027, the risk in materials is narrower and easier to pinpoint. It sits in metals, energy-intensive products and the building packages that use them most. Trade policy is setting a floor under metals and equipment, while energy costs raise the cost of materials produced abroad. Energy prices and pending trade decisions will determine what happens next. Because tender prices trail input costs by three to six months, the increases visible through late 2026 are what early-2027 bids will carry.
Contractors struggled to keep their margins in step with costs through COVID-19, and the cushion they rebuilt since then is largely gone. With demand soft, contractors have few chances to pass higher costs on to owners outside a handful of sectors. They’ve concluded that broad relief isn’t coming, and their margin expectations have held even as confidence in the wider market has fallen.
“Contractors are treating geopolitical and policy uncertainty as a standing risk premium,” said Andrew Volz, Manager, Americas Projects & Development Services Research at JLL. “A bid now reflects how risk is shared as much as what the work costs. Who carries the risk of rising prices, long lead times and labor shortages moves the price, and that’s where owners still have room to act. The programs holding up best treat cost as a live input and revisit it at every stage gate.”
The most resilient capital programs update costs at each decision point, tie them to the building packages and markets where the exposure sits and set triggers that reopen a decision when conditions change. The report outlines what JLL’s cost management teams see working.
For plans that age between approval and tender, that means building cost checks into the program, with tender price reviews and trigger points at each stage gate. For volatile packages such as structure and mechanical, electrical and plumbing, it means setting pricing and procurement strategy early. For contested trades, it means mapping trade demand against local data center and power pipelines before choosing a contractor, a step that matters most where pipelines are outrunning the workforce, as in the South. When contractors are pricing in risk, owners can match their contract and procurement models to where price and availability risk should sit. And for investors with portfolio pipelines, it means re-testing feasibility against current benchmarks and buying across projects together.
FAQs
1.) Question: What are tender prices, and why does JLL forecast them instead of material or labor costs?
Answer: Tender prices are what contractors bid to deliver a project. They combine input costs, demand and contractor margins and risk pricing into a single number. JLL’s Construction Costs Index tracks tender price inflation, and JLL’s Construction Costs Monitor tracks the input costs that lead it by roughly three to six months. JLL forecasts U.S. tender prices will grow 3.1% to 4.2% in 2027.
2.) Question: If escalation is easing, why aren’t construction costs coming down?
Answer: The 2027 forecast of 3.1% to 4.2% is lower than 2026’s 3.5% to 4.6%, but it’s still above the pre-2020 global norm of 2% to 3%. Each year’s increase also compounds on a cost base that jumped in 2021 and 2022 and hasn’t come back down
3.) Question: What does it mean for the South to carry the most construction work per worker?
Answer: By 2028, the South is expected to carry more non-residential construction work per worker than any other U.S. region, as its pipeline grows faster than its workforce. That pressure can show up in schedules, trade availability and contract terms as much as in price. However, a small number of very large projects, such as data center campuses and power plants, can also swing a region’s ratio sharply. Locally, these projects can reset pricing and draw crews from existing sites with higher pay. Across a whole region, those local effects are averaged in with many other markets, so regional tender price forecasts may move less than the workload measure.
4.) Question: Why do data centers and power projects matter so much for other construction types?
Answer: Mechanical, electrical and plumbing (MEP) systems account for 50% to 58% of total costs on a data center, compared with 28% to 32% on a commercial building, according to JLL’s Global Construction Costs Index 2026. That concentrates demand on electricians, mechanical contractors and pipefitters. Where data center and power projects cluster, other projects that need the same trades compete with them for crews, even when the local market is otherwise soft.
5.) Question: How does this report relate to JLL’s Global Construction Costs Index?
Answer: The U.S. Construction Perspective builds on JLL’s Global Construction Costs Index 2026 and uses the same index data. The U.S. forecast of 3.1% to 4.2% sits inside the 3% to 6% global baseline set in the index. The report adds a U.S. view of where demand, labor and contractor pricing are shifting, including how growth and workload are moving across the Northeast, South, Midwest and West.
