Construction Industry Economic Forecast: Late Quarter Disruption Renews Uncertainty

The volatility in the energy sector left a noticeable impact on material prices in Q1, most notably diesel and aluminum. This late-quarter disruption injected renewed uncertainty into the market, prompting owners, stakeholders, and consumers to take a more cautious stance reminiscent of the wait-and-see approaches that surfaced during 2025. The QCI index for this quarter registered just below 2.5%, marking the largest quarter-over-quarter rise in four years, a surge not seen since the immediate post-pandemic period when markets were navigating the aftermath of widespread inflation and unprecedented stimulus measures.

Looking ahead, we anticipate that pricing conditions will remain difficult, with continued upward pressure on key inputs. The ongoing developments in the Middle East will exacerbate uncertainty in the energy markets. Domestically, we will be paying attention to fluctuations in fuel prices, as these costs have a direct influence on a range of other material and operational expenses. The industry is bracing for more variability than usual in its next round of forecasts, as the impacts from energy price swings could extend into numerous facets of the construction sector.