The construction industry entered 2026 with more momentum and complexity than it has seen in years. Accelerated schedules, rapidly evolving technology and increasing demands on quality and performance have become the norm rather than the exception. To better understand where the industry is headed, we spoke with leaders across Harris Co., a St. Paul, Minnesota-based mechanical contractor, in areas including fabrication, project sales, construction, design, building automation and human capital. These conversations weren’t about predicting a single defining trend, but about identifying the forces reshaping how work gets done and what will matter most in the year ahead.

Common themes emerged quickly, including ongoing labor challenges, compressed schedules, the growing role of automation and artificial intelligence (AI), the rapid expansion of data center work and a renewed focus on long-term performance over lowest price.

The following is a collection of perspectives from across Harris that together offer a grounded look at where the industry stands today and what lies ahead.

The ‘faster than ever’ reality

Q: What are the biggest shifts you’re seeing in demand for data centers?

Liquid cooling and speed are two of the biggest shifts we’re seeing. Data centers have always moved fast, but now the timelines are extremely compressed, even compared to a few years ago. 

At the same time, the mechanical scope is growing significantly. In AI-driven builds, the scope for mechanical contractors can be two times or more than that of a traditional cloud storage data center. This fundamentally changes how these projects need to be planned and executed. 

— Matthew Maltby, construction executive

Q: Are some emerging risks happening that maybe owners don’t fully appreciate yet when they’re quickly planning these large projects?

One of the biggest risks is the push to build these projects faster and faster. Owners are expecting contractors to work longer hours to make that happen, which means a lot of overtime and crews working 60-hour weeks to deliver what used to be a 40-hour scope. 

At the same time, the scope itself has grown significantly. It’s twice the scope, twice the man-hours and more than twice the capital expense on many of these AI-driven data center projects.

What’s really changing is how that work has to be resourced. We still have our traditional teams building the core and shell and the basic infrastructure of the data center, but now we’ve essentially had to create an entirely separate team on every project just to handle the liquid-cooling scope. In that sense, one project has effectively become two projects in terms of manpower management and shop resources. 

You can’t train a new team to do liquid cooling on every job, so we’re focusing on task-specific work with a dedicated labor force that can carry productivity from one building to the next.

On top of that, the labor market is tightening even further. Large Internet and technology providers are actively exploring incentives to attract labor to their sites over others, whether it’s per diems or other special circumstances. 

As demand continues to outpace supply, labor costs are climbing, and contract negotiations are becoming more challenging for both union craft labor and management. That dynamic creates additional risk that owners don’t always fully appreciate when planning these projects on such aggressive timelines. 

— Christopher Chewning, vice president of data center operations

Fabrication: Where efficiency gains are coming from

Q: Where has the fab shop seen the most efficiency gains in the last couple of years, and how do you see those continuing to evolve?

The biggest gains have come from automated machinery, and that continues to be a major driver as things progress. I don’t see that slowing down anytime soon. We’re starting to see robotic welders and similar technologies come into play. Historically, mechanical contractors in manufacturing have been a bit behind when it comes to robotics, but we’re starting to gain ground there now.

We’re also beginning to see more AI-enabled machinery filter into our fab shops. With the ongoing shortage of skilled labor, we need to keep finding ways to bridge that gap using every tool available, and automation is a big part of the solution. 

— Mike Nelsen, plant manager

What owners are underestimating

Q: What risks do you think owners are underestimating right now heading into major projects, and how can contractors help them get ahead of those challenges?

When it comes to extra design and specialized mechanical systems, cheaper is not always better. Owners often underestimate the importance of equipment quality and the need for redundancy. You see this especially in environments such as clean rooms, where the systems are highly specialized, and the upfront cost is already significant.

The challenge is that if a critical piece of equipment goes down, it can shut down an entire revenue stream for the business. That risk makes redundancy essential so maintenance can be performed or systems can be taken offline without impacting operations. Because redundancy adds to the initial cost, it’s often overlooked, but it’s one of the most important safeguards contractors can help owners understand and plan for early in the project.

Q: Are there any outdated mindsets in the industry that you think need to disappear?

I’d like to see the pricing-only mindset disappear. There’s a subset of the industry that races to the bottom on price and assumes all mechanical contractors are basically the same. Maybe one wants a little more margin and another wants less, or one can carry more overhead than another, but at a high level, the work should not be viewed as interchangeable.

When someone comes in significantly lower than everyone else, they’re usually cutting corners in some way. A lot of owners don’t see that upfront, which makes it our responsibility as contractors and partners to clearly show where the real value lies beyond the number on the bid. 

— Anthony Bolduc, senior project sales representative

Design and regulatory shifts to keep on the radar

Q: What design trends in large commercial projects do you see gaining momentum?

Electrification and refrigerant changes will continue to gain momentum, largely because codes are now in place enforcing them. We’re seeing more new buildings designed without natural gas, which pushes systems toward heat pumps and variable refrigerant flow (VRF) rather than traditional boilers and gas-fired equipment. 

At the same time, lower global-warming-potential refrigerants continue to roll out due to regulatory changes. Those requirements are being phased in by equipment type and year, and VRF systems will now be required to use the new refrigerants. 

The scale and speed of data center work driven by AI and cloud computing are newer challenges. These projects introduce new HVAC approaches, including liquid cooling, rather than traditional air-based strategies. The pace at which these facilities are being delivered is also forcing design and construction teams to rethink sequencing coordination, and how systems are scheduled and deployed to keep up with demand. 

— Kathryn Lee, associate director

Artificial intelligence: What’s real in 2026

Q: What do you think is the biggest misconception about AI in construction?

The biggest misconception is that AI will replace jobs. In reality, it’s not coming for the trades, and it’s not going to replace very much hands-on work. Where it will have an impact is in the office by taking on some of the routine tasks. Ideally, that doesn’t mean fewer people. I think we’re all going to need to get better at what we’re doing, rather than having fewer of us around the office. 

Q: How clear is the outlook for where AI is going in the coming years?

From a technology standpoint, AI is already here. The limitation isn’t the tech anymore, it’s the people. AI can already do more than we know how to responsibly apply. The real challenge now is figuring out how to use it in the right way and build trust around it. 

So, it’s hard to predict three years out because the next hase isn’t about better technology. It’s about human decision-making and how willing we are to use these tools thoughtfully and effectively. 

— Akira Togawa, senior director of business automation and intelligence

Workforce shifts shaping the industry’s future

Q: How is the competition for skilled labor changing, and what shifts are we seeing in the construction labor market in 2026?

The competition for skilled labor is getting more challenging. The pool of experienced construction talent continues to shrink, and contractors are all competing for the same people across both union and nonunion trades. Fewer people are entering the trades right now, which means finding experienced workers is becoming more difficult each year.

As a result, contractors need to be more creative, especially when it comes to early career talent. At the same time, the rise of AI is starting to change the equation. Many of the routine tasks that entry-level roles have traditionally handled will increasingly be automated, which means the way we recruit, develop and define early career positions will continue to evolve.

Q: What would you tell construction leaders to prepare for as these waves of change hit the workforce?

Leaders in our industry should be preparing for changes in how they hire and develop talent. Today, we often bring people in straight out of college and grow them into project managers by having them handle things such as documentation, requests for information and submittals as they learn. As AI takes on more of that work, those roles will evolve. 

I think we need to get in front of that by making sure people have the skills to be efficient using today’s technology, since we know that the way we grow and develop that funnel of talent is going to change. 

— April Keizer, senior director of human capital