Houston Construction Starts Forecast to Rise 6% in 2026 as Population and Big Tech Drive Demand
According to Engineering News-Record, Houston’s construction market is pushing through labor and cost pressures in 2026, fueled by record population growth and major technology sector investment that is keeping project pipelines full across the region.
Market Activity and Key Numbers
The Greater Houston area added 126,720 residents between July 2024 and July 2025, making it the fastest-growing metro in the country, according to the U.S. Census Bureau. Total population has reached 7.9 million. That growth is translating directly into construction demand. Dodge Data & Analytics forecasts total construction starts will rise 6% year over year in 2026, recovering from a 3% decline in 2025. Nonresidential starts, including hospitals and schools, are projected to jump 11.7%, while residential starts are expected to grow 9%.
The Houston area also added 11,200 construction jobs, a 4% gain, between February 2025 and February 2026, the most of any metro area in the US for that period, according to Bureau of Labor Statistics data.
Big tech is adding significant project volume. The Greater Houston Partnership reported in late 2025 that Apple is building a 250,000-sq-ft advanced manufacturing facility in the region, while Foxconn is investing $450 million in an AI server production facility and Inventec is committing $250 million to a manufacturing plant. Healthcare and data centers are drawing the most construction workers, according to Tamara Hancock, executive director of the American Subcontractors Association Houston Chapter, with K-12 and higher education projects close behind.
On the infrastructure side, the Texas Transportation Commission awarded Ferrovial a $1.47-billion contract on April 30 to construct one of the final sections of Grand Parkway/SH 99, Houston’s third loop highway.
What It Means for Subcontractors
- Bid carefully on new work. Hancock notes that most large project work is already on the books, meaning subs are being selective about taking on additional commitments. Overextending now could leave you short-staffed when those existing projects ramp up.
- Compete for workers locally, but expect pressure. Andrew Halphen, director of preconstruction at Manhattan Construction Co., warns that megaprojects in the Texas panhandle and Louisiana are pulling large contractors and workers out of the Houston market, driving up local pay rates and per diems. Budget accordingly for labor cost escalation.
- Protect your GC relationships. Manhattan Construction is leaning on long-standing subcontractor relationships to secure bid coverage. Halphen also notes that subs are increasingly choosing to work with contractors that are safe, reliable, and focused on mutual project success, so your reputation matters more in a tight labor market.
- Watch material pricing. Hancock specifically flagged material price escalation as an ongoing concern, alongside the challenge of filling skilled labor positions as the workforce ages. Factor contingency buffers into bids for tech and healthcare sector projects in particular.
- Nonbuilding infrastructure is still active. Despite a projected 3.7% dip in nonbuilding starts overall, the Ferrovial Grand Parkway highway contract signals that large civil and infrastructure scopes remain in play for qualified firms.
