Rochester's construction sector is heading into 2026 with significant optimism. Leading Rochester construction firms forecast strong growth in 2026 despite ongoing labor shortages and supply chain challenges, according to reporting from Rochester Business Journal published December 11, 2025.
This industry outlook aligns with national projections from the American Institute of Architects (AIA), which projects nonresidential construction spending will rise 4% in 2026, led by public-sector, healthcare, and education work. For Rochester contractors, the outlook positions 2025-2026 as a strong growth period with multiple project opportunities across key sectors.
Jim McKenna, senior vice president of LeChase Construction Service, a Rochester-based full-service construction management and general construction firm established in 1944, expressed confidence in the local market.
"We're pretty optimistic for a strong 2026 locally," McKenna stated, noting that "we don't see a large change over from 2025." LeChase sees sustained demand from core sectors including higher education, healthcare, and manufacturing, sectors that remain among the healthiest nationally with federal incentives supporting manufacturing and energy-related projects.
Terry Stevens, executive vice president at Pike Construction Services, a fifth-generation firm founded in Rochester in 1873, confirmed this sector-based growth pattern. Pike reports robust market conditions in Rochester for healthcare, public, and institutional work as construction needs shift from new ground-up development to strategic renovation and modernization of existing facilities.
A key innovation helping Rochester contractors manage labor constraints is increased use of offsite fabrication and modular construction methods. McKenna emphasized that LeChase "continues to stay focused on offsite prefabrication, as a way to deal with some of the current labor environment issues".
LeChase has expanded its prefabrication capabilities to include:
Industry research from McKinsey & Co. validates this strategy, showing that modular construction can shorten construction schedules by 20-50% compared to traditional on-site building methods. This efficiency gain is particularly valuable in a tight labor market where project timelines and cost control are critical.
The labor shortage facing Rochester contractors reflects a national trend. According to the Associated Builders and Contractors (ABC), approximately 499,000 to 500,000 new skilled workers are required in 2026 to keep up with national construction industry demand.
Stevens identified labor as a persistent challenge: "Labor continued to be a constraint in all aspects. The real question industrywide as we progress into 2026 isn't so much about do we have the work, but do we have the resources and people to actually perform the work."
Specific labor challenges include:
Cost volatility and procurement challenges continue to affect project planning and budgeting. Stevens noted that long-lead items such as electrical switchgear face extended procurement timelines due to supply chain constraints and uncertainty around tariff impacts.
The supply chain and tariffs are impacting the industry, and in some cases, it is very difficult to provide owners with a final date of completion.
For project owners and developers, this supply chain uncertainty emphasizes the importance of early procurement planning and transparent contractor communication. Stevens explained that successful contractors in this environment will differentiate themselves through:
McKenna emphasized that LeChase is "staying focused on innovation, keeping pace with industry technologies and AI." Adoption of artificial intelligence and advanced project management technologies is helping contractors manage complexity, improve safety, and optimize resource allocation despite labor constraints.
This technology focus positions Rochester contractors competitively, as firms that successfully implement AI-driven project controls and predictive analytics gain advantages in project delivery and cost management.
A significant example of the modernization trend is the Rochester Broadway Theater League (RBTL) partnership with Pike Construction Services, LaBella Associates, and community advisors on a $65 million renovation of the West Herr Performing Arts Center on East Main Street.
Named PROJECT RESTOURATION, this renovation effort will be the largest renovation by an arts organization in Rochester's history when completed in 2030. The project exemplifies the shift toward strategic modernization and adaptive reuse of existing facilities rather than ground-up new construction.
Stevens noted this trend: "Right now it's not just about building from the ground up, it's also about jobs where people are trying to use what they already have and trying to retrofit." This modernization approach offers opportunities for specialized renovation contractors, MEP (mechanical, electrical, plumbing) professionals, and historic preservation specialists.
For construction firms, trade contractors, and equipment suppliers in Rochester and Western New York, the 2026 outlook presents several implications:
Project Diversity: Sustained demand across healthcare, education, and public-sector projects provides diverse opportunities for different types of contractors and specializations.
Workforce Planning: Companies that proactively recruit, train, and retain skilled workers will gain significant competitive advantage in a tight labor market. LeChase's emphasis on "workforce development" and internship programs provides a model for talent retention.
Technology Investment: Construction firms that invest in modular fabrication capabilities, AI-driven project management, and advanced safety technologies will improve project delivery and profitability.
Supply Chain Management: Early procurement planning, long-lead item identification, and strong supplier relationships will become increasingly important as tariff uncertainty persists.
Market Differentiation: Construction firms that deliver transparent communication, schedule certainty, and cost control despite external pressures will win competitive bids and build long-term client relationships.
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