Bernstein makes the case for a rebound in U.S. non-resi construction in 2026

Published 22/09/2025, 15:42
© Reuters.

Investing.com -- Bernstein expects U.S. non-residential construction to rebound in 2026 as monetary and fiscal policy tailwinds align and equipment supply tightens.

In a new note, Bernstein said: “This call makes the case for a rebound in US non-residential construction in 2026. Monetary and fiscal policy are aligning, the equipment supply/demand balance is tightening, and despite the strong rally off the April bottom, stocks still have room to run.”

Non-residential construction spending, excluding infrastructure, data centers and the grid, has fallen 15% since 2023, in line with past downturns. Overall spending is tracking down 1% year-on-year in 2025. 

However, Bernstein pointed to a sharp monetary turnaround, noting that “global money supply growth leads construction activity by 24 months (R2=0.67) and it started rebounding in late 2024, which suggests a non-resi recovery in mid-2026.” 

On the fiscal side, the recent U.S. tax policy shift on accelerated bonus depreciation could “drive 7% cross-cycle growth in non-resi construction spend,” particularly in factory construction, which could be boosted by 20%.

Bernstein’s model forecasts 4% growth in 2026, led by five markets: public infrastructure (+3%), manufacturing (+12%), electric grid (+8%), renewable power (+20%), and data centers (+25%). 

Meanwhile, commercial and office markets remain pressured, expected to decline 6% year-on-year.

The bank also flagged “four signs that the equipment supply/demand balance is tightening,” including improving rental rates, rising used equipment prices, declining used inventories, and healthy new equipment levels.

On stock selection, Bernstein said: “URI stands out” in the U.S., with 40% of revenue from non-residential construction and growth at 2x the market. In Europe, AHT and AMRZ are highlighted, with CRH rated Outperform.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.