Office Construction Hits a 14-Year Low Nationally — And Industrial Has Fallen 63% Since 2022. Where Did All the Work Go?

Office construction activity across the U.S. has slowed to a near standstill, with Newmark’s Q1 2026 report finding only 17.2 million square feet of office space under construction nationwide — the lowest level in 14 years — as developers continue pulling back from a sector still adjusting to hybrid work and elevated vacancy rates sitting at 20.2%. Industrial construction has fallen even more dramatically — down 63% since its 2022 peak — while retail construction came in at just 64.2 million square feet underway in Q1 2026, an 8% decline from 2025 and far short of the 10-year average of 90 million square feet. Outside of data centers, the broader construction outlook is considerably weaker, with construction input prices increasing at a 12.6% annualized rate in the first two months of 2026 — approaching levels seen at their 2022 peak — further suppressing developer appetite for speculative projects. For Pacific Northwest contractors who have historically relied on office tenant improvement, big-box retail, or speculative industrial work, the data is a clear signal to diversify into the sectors that are actually growing: public infrastructure, healthcare, data centers, telecom, and energy retrofits. Oregon Department of Transportation + 2

Source URL:https://www.credaily.com/briefs/office-construction-hits-14-year-low-as-concessions-rise/