The results of the CBIZ 2026 Construction Survey suggest that the Midwest is enjoying the benefits of strong growth, while a tight labor market remains a clear pain point.
The majority of respondents see 2026’s backlogs compare favorably to the start of 2025, with 35 percent saying they are “about the same” while 39 percent report increased backlogs compared to the prior year. This marks another year of survey results reporting durable backlog strength for Midwest contractors. Only 26 percent of respondents are tracking backlogs that have declined over the previous 12 months.
Overall, respondents also appear to see more growth ahead as financing appears largely available throughout the Midwest. Of those surveyed, 85 percent expect loan terms and credit to remain as accessible over the next 12 months as they had been in the past 12. There is a similarly strong expectation of stable bonding capacity, with 90 percent anticipating bond issuers will remain open to financing projects in the year ahead. These results make the Midwest the U.S. region most optimistic about the short-term availability of financing.
In terms of technological sophistication, the Midwest reports the highest rate of AI pilots in select projects or processes (34 percent) and the second highest in actively implementing AI across multiple areas (21 percent). With so much AI infrastructure being built in the Midwest, it stands to reason that the region is among the first to harvest the fruit of that labor.
Succession planning also surfaced as a business continuity concern, with 9 percent of Midwest respondents identifying business continuity and management succession as their greatest threat over the next 12 months. Among respondents who indicated they are currently exploring succession planning options, internal transition paths appear to be the primary area of interest. Family or intergenerational transfer was the most commonly selected path, cited by 67 percent, while roughly one in five respondents also indicated they are considering an Employee Stock Ownership Plan (ESOP), sale to existing partners, or management buyout. External exit paths may also be part of the conversation for some businesses, particularly specialty contractors, HVAC providers, and other service-oriented companies with a recurring service component that can be attractive to strategic buyers or private equity investors.
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The Midwest is the region with the highest percentage of respondents reporting one to four bidders on a typical project, while 26 percent report competing against five to nine bidders. While Midwest firms may be seeing a relatively favorable project-bidding environment, competition for labor remains intense.
Talent development (59 percent), workforce solutions/recruitment (57 percent), and technology and innovation to maximize efficiency (55 percent) were in close competition for the region’s top strategic goals. The persistent labor shortage that seems to be abating elsewhere in the U.S. remains a considerable challenge in the Midwest, with the majority (55 percent) identifying it as the greatest threat to their business over the next 12 months. The next highest-ranking threat on that list is “lack of work or project cancellations” at just 19 percent. “Lack of work or project cancellations” was ranked as the greatest threat in every other U.S. region.
In addition, wages are rising in the Midwest, with 64 percent reporting average pay increases of 4 to 5 percent. The Midwest had the lowest reported rate of 6 percent or more wage increases of anywhere but the Northeast.
In the Midwest, all signs point to continuing strong demand and all the opportunities and challenges that come with it. CBIZ reports on the industry’s compensation outlook annually, most recently in 2025. Keeping up to date with industry standard compensation rates can help ensure businesses are best equipped to attract and retain top talent, particularly in high-growth conditions like the Midwest is currently experiencing.
