AEM's 2026-2027 Construction Outlook: What the Forecast Actually Means for Your Fleet

For a couple of years now, every conversation with a general contractor or a site-work sub has started the same way: "What's this year actually going to look like?" The Association of Equipment Manufacturers (AEM), working with Oxford Economics data, just gave the industry its clearest answer yet in its September 2026 release, "Ag, Construction Industries Settle for Stability in 2026." The headline isn't explosive growth. It's something contractors have been quietly hoping for anyway — a floor.

That question matters more than it used to. Coming off a stretch of high interest rates, uneven material costs, and headline-driven anxiety about the broader economy, a lot of the excavator, dozer, and skid steer operators we talk to have been holding off on fleet decisions — delaying a trade-in, running an older machine an extra season, waiting to see which way things break before committing to a lease or a loan. AEM's release is the first real data point in a while that gives that decision some shape instead of just more uncertainty.

The Number That Matters: 0.8% in 2026, Then a Real Climb

AEM's Senior Director of Business Intelligence, Al Melhim, revised the 2026 global construction growth forecast down to 0.8%, a meaningful cut from the earlier 2.32% projection. That's the kind of number that makes a fleet owner nervous when it's the only thing they read. But it's not the whole picture, and it's not where the story ends.

The same release forecasts 2.8% growth in 2027, followed by an average of 3.7% annually from 2028 through 2030. In other words: 2026 is the trough, not the trend. If you're a demolition contractor, a grading sub, or a roofer who also runs a dirt crew, that shape — a shallow dip followed by a real, sustained climb — should change how you think about equipment decisions made this year.

That chart is our own illustration built directly from AEM's published figures — not an AEM graphic — but every number on it traces back to their September 2026 release.

Why the Dip, and Why It's Not the Same Story as Ag

AEM bundles construction and agricultural equipment outlooks together because both sectors buy from a lot of the same manufacturers, but the two stories have diverged hard this cycle. On the ag side, row crop farmers have absorbed six straight years of losses, debt-to-asset ratios sit at a 20-year high near 14%, and tariff costs between February 2025 and July 2026 have run an estimated $2.6 billion industry-wide, with machinery alone accounting for $1.5 billion of that. High-horsepower ag equipment retail sales are projected to land 18-25% below 2025 levels.

Construction is a different animal right now. The 2026 slowdown is concentrated in specific segments — office construction is down an estimated 7.7%, industrial down about 8%, and residential essentially flat in interest-rate-sensitive markets. Meanwhile, the segments that touch most of BFC's customer base are holding up or accelerating:

• Data centers: up an estimated 11% in the U.S. for 2026, with investment climbing from $150.8 billion in 2025 to $173.8 billion in 2026 and a projected $318.6 billion by 2030

• Infrastructure, energy, public works, transportation, and broadband expansion — the backbone of most excavation, grading, and dirt-moving contracts

• U.S. growth accelerating to 1.6% in 2027 and roughly 2.1% by 2028; Canada tracking even stronger at 1.9% and 2.9% over the same span

For a contractor running excavators, dozers, and dump trucks on data center pads, utility corridors, or DOT work, that 0.8% headline number understates what's actually happening on your bid list. The North American construction pipeline AEM is tracking right now sits at roughly $7.4 trillion — that's the backlog the industry is working through, not a number that evaporates because of one soft year.

What AEM's CEO Is Actually Telling Manufacturers

AEM President and CEO Megan Tanel put it directly in the companion release: "The construction industry remains fundamentally strong, supported by long-term infrastructure investment, sustained demand for housing, and continued private-sector development." Her sharper warning was aimed squarely at operators who sit on old iron and older processes: "The biggest threat is inaction. If the industry fails to modernize, address workforce challenges, or maintain a competitive policy environment, it risks slowing progress."

Tanel also flagged where the real productivity gains are coming from in this cycle — and it's not just bigger buckets and more horsepower: "Contractors are no longer piloting digital tools, automation, or connected equipment. They are integrating them into daily operations." Machine control, telematics, AI-assisted job costing, and connected fleet management are graduating from "nice to have" to standard operating procedure across the segments that are actually growing.

What This Means If You're Deciding Whether to Buy Now

A soft-but-not-collapsing 2026 followed by a real climb into 2027-2030 is, honestly, close to the best-case scenario for financing a purchase this year instead of waiting. Here's the practical read for a contractor weighing it:

• Equipment lead times and used-market pricing tend to loosen during a soft demand year — this is often the best window in a cycle to buy, not the worst

• Financing a machine now means it's paid down (and your credit profile strengthened) heading into the stronger 2027-2030 bid environment, instead of scrambling to finance and mobilize equipment mid-surge when everyone else is doing the same thing

• A 0.8% national growth number hides enormous variance by segment — if your backlog is DOT, utility, data center, or infrastructure work, you're likely looking at a very different (better) local reality than the headline suggests

This is exactly the case for renting versus owning that comes up on almost every call we take. Renting makes sense for a true one-off scope outside your normal work. But if data center site work, utility trenching, or public infrastructure jobs are a repeatable part of your backlog through 2027 and beyond — which AEM's numbers suggest they will be for a lot of contractors — owning the machine outright, financed against real anticipated work, almost always wins on total cost once you're past a handful of jobs. Every week you rent instead of finance is a week of payment going to someone else's balance sheet instead of building equity in yours.

The Technology Piece Isn't Optional Anymore

Tanel's comment about connected equipment moving from pilot programs to daily operations lines up with what we're seeing across every equipment category we finance. Machines with factory-integrated grade control, telematics, and remote diagnostics are commanding stronger resale values and lower unplanned downtime than comparable machines without them — something worth weighing heavily if you're cross-shopping, say, an electric-drive dozer against a conventional torque-converter machine, or a medium wheel loader with a full connected-equipment package against a bare-bones competitor.

Manufacturers know this too. The wave of new releases coming out of ConExpo 2026 wasn't just about bigger engines — it was overwhelmingly about tighter machine-to-cloud integration, because that's what the segments AEM identifies as strongest (infrastructure, data centers, utility work) actually demand from their subs.

Reading the Forecast by Trade

Averages hide a lot, so let's break down what AEM's numbers actually mean depending on what kind of contractor you are:

• General contractors and site-work subs bidding public and infrastructure work — you're sitting in the strongest part of this forecast. Transportation, utility, and public works spending is one of the segments AEM names explicitly as holding up demand, and the $7.4 trillion North American pipeline is disproportionately weighted toward exactly this kind of work. If your backlog leans this direction, 2026 is a buying year, not a waiting year.

• Demolition and site-prep contractors working commercial teardown and redevelopment — office and industrial construction softness (down 7.7% and roughly 8% respectively in 2026) can mean fewer new-build starts, but it often means more teardown, adaptive reuse, and land-clearing work as owners reposition underperforming assets instead of building from scratch. Track your local permit activity, not just the national new-construction number.

• Roofers and building envelope subs — residential is essentially flat nationally for 2026, which is a very different story from the sharp declines the industry saw a few years back. Flat is stable. Combined with an eventual rate-driven pickup as 2027-2028 growth materializes, this is a reasonable window to add a second crew's worth of equipment rather than running your existing fleet into the ground.

• Aggregate, hauling, and dump truck operators — data center construction, at 11% projected growth and climbing toward $318.6 billion in investment by 2030, moves an enormous amount of material: site prep, foundations, underground utility work, access roads. If you're not already positioned near a hyperscale build in your region, it's worth finding out where the nearest ones are being planned.

The Financing Angle AEM's Data Doesn't Cover — But We See Every Day

What a macro forecast like this one can't tell you is your own cash flow, your own bonding capacity, or how a specific lender is going to look at your credit file this quarter. That's the part we deal with directly. A few patterns we're seeing right now that line up with AEM's read on the market:

• Lenders are generally more comfortable financing equipment tied to a documented, signed backlog of work — infrastructure and public-sector contracts in particular carry a lot of weight in an approval conversation right now

• Deposit requirements can be structured with little to nothing down for contractors with strong credit and a track record on similar work, though a larger down payment may apply for higher-risk profiles

• Used equipment values have held up reasonably well through the 2026 softness precisely because manufacturers and dealers haven't needed to dump inventory the way they might in a sharper downturn — which is good news if you're financing a used machine instead of new

None of that shows up in a national growth percentage, but it's exactly the kind of thing that determines whether financing makes sense for your specific situation this year. That's also why we always point contractors to actually apply rather than trying to estimate their own payment from a blog post — every credit file, every piece of collateral, and every backlog looks different, and a real quote beats a guess every time.

The Bottom Line for 2026-2027

AEM's own framing is the right one to end on: the market is "transitioning from rapid contraction to stabilization." A single soft year with a clear, forecasted recovery attached to it is not a signal to sit on the sidelines — it's a signal to position your fleet now, on financing terms that work for your cash flow, ahead of the stronger years the data itself is projecting. We finance excavators, dozers, wheel loaders, skid steers, dump trucks, and more for exactly this kind of contractor: one who reads a forecast like this and moves early instead of waiting for everyone else to catch up.

Ready to Position Your Fleet for 2027 and Beyond?

Visit the BFC Equipment Loans home page to see how we work with construction, demolition, and site-work contractors nationwide. Ready to move now? Apply for equipment financing and get a real answer fast. Looking to buy or sell used equipment? Browse our equipment inventory. And if you want more research like this in your inbox, subscribe to the BFC blog.