According to audience poll responses, contractors today are worried about insufficient demand for their construction services—a stark contrast from just a couple months ago.

On Dec. 10, Anirban Basu gave his final economic update webinar of the year, recounting construction’s economic performance in 2025 and forecasting how that has positioned the industry going into 2026.

Much of the presentation centered around data centers, tariffs and inflation, with some remarkable shifts in audience poll results as well. Basu breaks all this down and more. Review his top takeaways, poll results and audience questions below:

TAKEAWAYS

Here’s the headline: We came into the year with this still lingering inflation issue; it is true that inflation or the pace of price increase economywide is not what it was in mid 2022 when it peaked. Inflation’s fallen since that time but again to remind everyone the Federal Reserve’s target for inflation is 2%—we’ll get an announcement from the Federal Reserve in just a few months—but the point is inflation is still above the Federal Reserve’s 2% target. (6:03)

Inflation between February of 2025 and September of 2025 did not decline; it’s stubbornly high at 3%. (7:26)

So the inflation rate has not fallen and the federal reserve therefore is limited in how much it can cut interest rates based on that. (8:22)

Because financing costs are still high, interest rates are still high. There’s more uncertainty in the economy. (19:06)

So the government might lose some revenue, might have to give back some revenue, but we’re going to be in this elevated tariff regime for quite some time, irrespective of what the Supreme Court decides. (25:52)

In a recent survey, about one in eight of our contractors indicated that they’re working on a data center project, one in eight. For those not associated with a data center project, the average [backlog] is eight months. So one of the things that we know is that economywide and in the construction industry, this artificial intelligence infrastructure boom is keeping things together. (39:20)

In a typical year, the risk of recession in America is around 10 to 15%; but if you ask economists at Goldman Sachs, Wells Fargo, J.P. Morgan, ‘What’s the risk of recession the next 12 months?’ They’ll say between 30 and 40%. (56:19)

Many consumers are now exhausted financially, the rich are doing great, the distance between those who have and those who have not is growing. (59:20)

One of the things that happened over the course of the year is that student debt repayment terms changed and about a third of those who have student debt are delinquent on that debt. (59:31)

Lots of talk about an artificial intelligence bubble…There’s also been some concern about private credit bubbles. (59:44)

My forecast is for growth in 2026 because I’ve enumerated some of the sources of growth, but now we have some real risks. (60:22)

POLL 1: WHICH OF THESE IS THE LEADING CHALLENGE FOR YOUR COMPANY TODAY?

For the first time in recent memory, and maybe I will go to the next slide to see what previous responses look like, but insufficient demand for construction services at 39% is the leading response. (18:20)

POLL 2: OVER THE LAST THREE MONTHS HOW HAS YOUR COMPANY’S BACKLOG FARED?

What we see is a bit more people have said their backlog actually has increased in the past three months so that tells me on the one hand people are concerned about demand for construction services but backlog for some people has gone up in the few months. How do we reconcile this? It’s very difficult. (37:30)

POLL 3: WHERE DO YOU EXPECT YOUR COMPANY’S PROFIT MARGINS TO BE A YEAR FROM NOW?

A bit more people expect their margins to be slightly slimmer a year from now…And this plays to all things we’ve been talking about, like rising costs and then in many categories of construction, declining demand for construction services. (53:45)

QUESTIONS

Question topics focused heavily on tech, from data centers and quantum computing to AI.

They covered today’s tariffs and then reflected on the tariffs that led to the Great Depression.

Basu also pivoted back to consumer spending patterns like mortgage rates.

To listen to the full Q&A, you can watch the recording—and be on the lookout for Basu’s first forecast in 2026!

SEE ALSO: ‘LADIES AND GENTLEMEN, THIS DOES NOT MEAN RECESSION’: ANIRBAN BASU ON STATE OF 2025 Q3 CONSTRUCTION ECONOMY