Carolinas water, sewer work shows resilience amid softer 2026 outlook
(UI) — Water and wastewater construction remains a relative bright spot across the Carolinas heading into 2026, even as contractors nationwide report a cooling outlook, according to new survey results released by the Carolinas Associated General Contractors.
Findings from AGC of America’s 2026 Construction Outlook show contractors in North Carolina and South Carolina continue to see steady opportunities in water and sewer markets, supported by solid backlogs and ongoing public infrastructure demand, despite broader economic uncertainty.
“Healthcare, data centers, power, and water and sewer work are creating meaningful opportunities across the Carolinas,” said Dave Simpson, president and CEO of Carolinas AGC. “Backlogs remain solid and many firms are planning to hire, which tells us construction is still a driving force for economic growth in our region.”
North Carolina: Water and wastewater remain active
In North Carolina, contractors reported positive expectations for water and sewer construction, with a 38% net positive outlook, placing the sector among the state’s more stable markets for 2026. Nearly half of surveyed firms reported larger backlogs than a year ago, while another 31% said workloads were holding steady.
“We are seeing strong opportunities across data centers, water and wastewater, energy, manufacturing, and institutional work,” said Jim Rhodes, senior vice president at Wayne Brothers Companies. “That diversity is important. It allows our industry to stay healthy and keep moving forward, even when individual markets fluctuate.”
More than three-quarters of North Carolina contractors expect to add workers in 2026, though workforce shortages remain a major constraint, particularly for skilled craft and salaried positions.
South Carolina: Utility-related work supports confidence
South Carolina contractors also reported continued activity in utility-adjacent markets, with public building and institutional construction helping sustain demand tied to underground infrastructure improvements. About 45% of firms reported increased backlogs compared with last year, while 70% expect to expand headcount in 2026.
Labor availability continues to challenge project delivery, with a majority of firms reporting difficulty filling both craft and salaried roles.
Regional picture
Across the broader Southern region, water and sewer construction posted a 28% net positive outlook, outperforming several traditional commercial segments that showed weaker expectations. While national sentiment has softened, the Carolinas continue to outpace regional averages in utility-related work.
“If we want to grow this industry in a sustainable way, it comes down to people,” Rhodes said. “Our ability to deliver projects more efficiently and to value the people putting that work in place is what will ultimately determine how successful we are.”
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