According to results from the 2026 CBIZ Construction Survey, the construction industry is thriving in the South. The vast majority of respondents reported annual revenue of $1 million to $50 million (32 percent) or $100 million to $500 million (also 32 percent), with an additional 11 percent bringing in more than $500 million.
A staggering 41 percent of those surveyed say their 2026 backlogs have increased by more than 15 percent compared to the previous year. In another positive sign, loans and credit are largely expected to remain as available over the next 12 months as they are currently according to 72 percent of respondents. With firms eager to capitalize on favorable market conditions, strategic planning and market growth were jointly ranked the highest strategic priority over the year ahead at 56 percent each, with talent development a distant third at 48 percent.
It is not entirely sunny though, with the leading threat over the next 12 months perceived to be “lack of work or project cancellations,” ranked by 37 percent of respondents as the top concern. This result could reflect macroeconomic uncertainty stemming from expectations of interest rates remaining higher for longer, emergent public pushback on the data center buildouts driving regional activity, or inflationary pressures further affecting demand.
The longstanding labor crunch is still having an effect as well, with “labor shortages and rising wages” ranked the greatest threat by 26 percent of respondents. The South appears to be the region most affected by rising wages, with 9 percent indicating they have increased pay by 9 percent or more. That is the highest rate of top line raises reported in any U.S. region. A further 15 percent reported issuing pay increases of 6 to 8 percent, and 44 percent reported issuing pay improvements of 4 to 5 percent.
Among those Southern businesses exploring exits, intrafamily succession is far and away the preferred outcome at 63 percent, followed by a sale to private equity, an Employee Stock Ownership Plan (ESOP), or third-party all tied at 25 percent. Strong existing demand, high revenues, and rising backlogs explain why so many construction firms based in the South intend to pass their businesses on to the next generation.
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The South is the U.S. region furthest ahead in the AI race. Sixty-six percent of respondents report that their organization is either piloting AI in select projects (33 percent) or actively implementing AI across multiple areas (30 percent). Another 22 percent are currently researching AI without having started implementation. Only 7 percent have no plans to implement AI. That is the lowest rate of any region reporting.
The South’s growth prospects, financing conditions, and high interest in interfamily succession might make it an opportune time to align a business’ value with the markets. That will help ensure the next generation can build the future of a firm on the strongest possible financial foundation.
