What’s Driving the Construction Industry’s Next Chapter?

Will the 21st Century ROAD to Housing Act Pave the Way for Construction Growth?

Experian focuses in on the construction industry in the Commercial Pulse Report for July 28th, 2026.

The U.S. construction industry sits at the intersection of one of the country’s most pressing economic challenges: housing affordability. While demand for housing remains strong, supply has struggled to keep pace. Home prices have reached record highs, residential construction has slowed, and builders continue to face higher material and financing costs. Against this backdrop, newly enacted federal legislation aims to increase housing supply and improve affordability, potentially creating new opportunities for construction companies.

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But what does the industry look like today? Before the effects of the 21st Century ROAD to Housing Act begin to take shape, Experian’s latest commercial credit analysis offers a snapshot of the construction sector’s current financial health. The findings suggest an industry that is taking on more credit, managing higher balances, and positioning itself for future growth while maintaining relatively stable payment performance.

Construction Remains a Key Economic Driver

Construction continues to play a significant role in the U.S. economy, contributing more than 4% of Gross Domestic Product. Employment in the sector has continued to grow, and the number of private construction establishments has trended upward, underscoring the industry’s importance to economic activity.

Yet despite its strength, construction faces a paradox. Housing demand remains elevated, but affordability has deteriorated significantly. Median home prices have climbed to record highs, placing homeownership further out of reach for many Americans.

At the same time, residential construction spending has remained relatively flat despite rising construction costs. Housing starts and building permits have also softened, highlighting ongoing constraints in the housing supply pipeline. Together, these trends illustrate why increasing housing inventory has become a national policy priority.

The 21st Century ROAD to Housing Act

In response to persistent housing shortages, lawmakers recently enacted the 21st Century ROAD to Housing Act, legislation designed to encourage additional residential development through several targeted reforms.

Among its key provisions, the legislation:

• Places limits on large institutional investors purchasing certain single-family homes.
• Streamlines building codes for qualifying multifamily developments.
• Expands grant opportunities for communities that increase housing supply.
• Simplifies housing voucher requirements to reduce administrative barriers.

Collectively, these initiatives are intended to remove obstacles to residential construction and encourage new housing development. While it will take time before measurable impacts become evident, many expect the legislation to create additional opportunities for construction firms over the coming years.

Credit Activity Tells an Interesting Story

Although the policy outlook appears promising, Experian’s commercial credit data shows today’s construction industry is already evolving.

One of the most notable findings is that the industry’s credit-active business population has grown only modestly since 2022.

Residential construction businesses increased by approximately 2%, while other construction businesses grew about 3%. By comparison, non-construction industries experienced approximately 20% growth over the same period.

In other words, construction is not experiencing rapid expansion through the addition of large numbers of new businesses. Instead, much of the industry’s activity appears to be concentrated among existing firms.

Financing Demand Continues to Rise

Despite modest business growth, construction companies are seeking significantly more financing.

Commercial credit inquiries have risen sharply across both residential and non-residential construction, signaling that companies are actively pursuing additional capital.

This increased financing activity likely reflects several realities facing contractors today, including rising material costs, higher labor expenses, ongoing project commitments, and preparations for future development opportunities.

Interestingly, higher inquiry volumes have not translated into substantially more new credit accounts.

Experian’s analysis shows that new tradeline formation per active business has declined across both construction and non-construction industries.

Rather than opening numerous new accounts, businesses appear to be relying more heavily on existing credit relationships.

Commercial Cards Continue to Play a Central Role

Commercial cards remain the primary source of new credit for construction companies and generally carry higher average credit limits than those observed in non-construction industries.

Beyond commercial cards, construction businesses also tend to utilize more commercial lines of credit and commercial loans than businesses operating in many other sectors.

This financing mix reflects the industry’s ongoing need for flexible working capital to purchase materials, fund payroll, and manage projects that often involve long payment cycles.

Existing Borrowers Are Taking on Larger Balances

Another important trend emerging from Experian’s data is the steady increase in outstanding balances.

Since 2023, average commercial balances have continued to rise across construction businesses, suggesting companies are making greater use of available financing.

Higher balances do not necessarily indicate financial stress. In many cases, they reflect businesses investing in growth, financing larger projects, or managing increased operating costs in a higher-price environment.

The broader takeaway is that construction companies are assuming greater credit exposure than they were just a few years ago.

Stable Payment Performance Remains Encouraging

Perhaps the most encouraging finding from Experian’s research is that higher borrowing has not been accompanied by widespread deterioration in payment performance.

Despite increased balances and greater revolving credit utilization, delinquency trends have remained relatively stable.

This suggests construction companies are generally managing their expanded financial obligations responsibly.

Rather than signaling heightened credit risk across the industry, the data points to businesses strategically utilizing financing while maintaining healthy repayment patterns.

For lenders, suppliers, and other organizations serving the construction sector, this stability provides an encouraging indicator that increased credit utilization has largely been supported by borrowers capable of managing additional obligations.

Looking Ahead

Construction stands at an important inflection point.

Housing affordability challenges remain significant, and residential supply continues to lag demand. The recently enacted 21st Century ROAD to Housing Act seeks to address these structural issues by encouraging additional housing development and reducing barriers to construction.

As these policy changes begin to take effect, construction companies may see increased opportunities driven by stronger residential demand.

Experian’s commercial credit data suggests the industry is entering this next chapter from a position of relative stability. While the number of credit-active construction businesses has grown only modestly, existing firms are actively seeking financing, utilizing more credit, carrying larger balances, and—importantly—continuing to demonstrate stable payment performance.

Whether the new legislation ultimately delivers the intended increase in housing supply remains to be seen. However, today’s credit trends indicate that many construction businesses are already positioning themselves to capitalize on future opportunities, making the industry one to watch in the months and years ahead.

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