Construction financial professionals grew more optimistic about the industry’s outlook during the third quarter of 2026 despite persistent concerns about materials costs, labor availability and broader economic uncertainty, according to the latest CONFINDEX survey from the Construction Financial Management Association (CFMA). CFMA’s quarterly CONFINDEX, which tracks construction financial professionals’ confidence in business conditions, financial conditions and the industry’s outlook, increased to 109 in the third quarter from 107 in the second quarter, a 1.9% increase.
Four of CONFINDEX’s five measures increased during the quarter, while one remained unchanged. The strongest improvement occurred in the Year-Ahead Outlook Index, which increased 4.5% to 115 from 110. The Business Conditions Index increased 2.8% to 112, while the Financial Conditions Index edged up 0.9% to 107. The Current Confidence Index remained unchanged at 105.
The improvement is particularly notable given the pressures facing the construction industry. More than four in five respondents — 80.8% — said materials prices are worse than they were a year ago, compared with 77.5% in the previous quarter. Looking ahead, 52.6% expect materials prices to deteriorate further over the next 12 months, while only 9% anticipate improvement. Yet construction financial professionals appear increasingly confident about the industry’s underlying demand.
Nearly 45% of respondents expect their companies’ backlog revenue to be higher a year from now, compared with 31% in the previous quarter. Another 42.3% expect backlog to remain approximately the same, while just 12.8% anticipate lower backlog. Profit expectations also improved. Nearly three in 10 respondents (29.5%) expect profit margins to improve during the next year, while another 45% expect margins to remain steady. Only 24% expect margins to deteriorate.
“Despite significant cost and workforce challenges, construction financial professionals are seeing underlying strength in the marketplace. The improvement in expectations for backlog and margins suggests that industry leaders remain cautiously optimistic about the year ahead,” said Dr. Anirban Basu, CFMA’s Economic Advisor.
Strong demand, however, is not evenly distributed throughout construction. Investment in data centers and energy generation and distribution continues to support construction spending, while segments including single-family construction, warehouses, lodging and office retrofits remain softer.
Labor Becomes the Industry’s Leading Concern
Many of the CONFINDEX respondents reported that finding skilled workers remains a significant challenge. Two-thirds of respondents (66.7%) said they are very or highly concerned about skills shortages, an increase of 19 percentage points from the second quarter. The survey narrative notes that strong demand in certain construction segments, combined with changes in the availability of workers, may be contributing to increased labor pressures.
Meanwhile, concern about construction demand declined during the quarter, falling 2.1 percentage points to 17.9%. Profit-margin conditions also showed signs of stabilization. The share of respondents reporting improved margins was essentially unchanged at 26.9%, compared with 26.3% in the second quarter. More significantly, the share reporting deteriorating margins dropped to 41.0% from 48.8%.
Confidence Higher Than a Year Ago
Despite economic uncertainty, all five CONFINDEX measures are above their September 2025 readings. The largest year-over-year improvement occurred in the Current Confidence Index, which increased 8.2%, followed by a 6.7% increase in the Business Conditions Index. The Q3 CONFINDEX results suggest that construction financial professionals see sufficient demand to offset some of the industry’s most significant cost and labor challenges — at least for now.
Image Courtesy of: CFMA
About CONFINDEX
CFMA’s CONFINDEX is a quarterly survey of construction financial professionals designed to measure confidence in the construction industry’s current and future business and financial conditions. The index tracks sentiment across business conditions, financial conditions, current confidence and the year-ahead outlook. A reading above 100 indicates that respondents expressing positive sentiment outnumber those expressing negative sentiment.
About CFMA
The Construction Financial Management Association (CFMA) is the only nonprofit organization dedicated to serving the needs of today’s construction financial professionals. Established in 1981, CFMA provides essential resources, education, and a supportive community for individuals across various sectors within the construction industry.
CFMA has more than 11,000 members and 90+ chapters throughout the U.S. and Canada that offer education and networking opportunities. CFMA’s Certified Construction Industry Financial Professional (CCIFP) designation has been the recognized standard of excellence for competent and ethical construction financial management for more than 20 years.
Visit www.cfma.org for more information about CFMA.
