2026 North American Industrial Services Market Outlook
The aggregate numbers hide a deeply uneven market. Sub sector selection now matters more than cycle timing.
Four themes defining the year.
Where demand is growing, where margin is under pressure, and what separates the operators pulling ahead from the ones managing decline.
01 Selective growth replaces broad momentum
Total US construction spending is forecast to rise around 1% to $2.2 trillion in 2026, but the aggregate hides a deeply uneven market. Public infrastructure and government funded projects are outperforming, while multifamily, traditional office and manufacturing face continuing headwinds. Companies positioned in power, water and data centre infrastructure are pulling ahead materially. The playbook has changed from riding the cycle to picking the right sub sectors.
02 Data centres and power are reshaping engineering and construction
Data centre construction is driving office spending up 6% in 2026, nearly all of it in mission critical facilities. Power construction is accelerating toward 14% growth by 2028. Water infrastructure leads all nonbuilding segments, pushed by PFAS compliance and the water intensity of data centres and advanced manufacturing. Engineering firms with exposure to power, water and digital infrastructure are reporting double digit organic growth in those segments. This is a structural shift, not a cyclical spike.
03 Nation building is the dominant Canadian theme
Canada’s federal agenda across defence, energy, transportation and northern development has created a multi year pipeline that materially improves the outlook for Canadian engineering and construction. Aecon’s backlog stands at $10.9B, up 12% year over year, and Stantec is growing double digits in Northern Canada. Defence spending, expected to scale from $63B to $155B by 2035, is a structural tailwind. The Arctic Over the Horizon Radar program, trans Canada infrastructure and nuclear refurbishment are the visible part of a far larger pipeline.
04 Mergers and acquisitions are back, and buyers are disciplined
59% of Canadian dealmakers expect increased activity in 2026, and the sector data confirms it. This round is driven by structural conviction rather than cyclical momentum. Buyers are targeting service oriented, asset light businesses with recurring revenue, infrastructure exposure and defensible technical capability.
Read this like an operator.
Our view on where the North American industrial economy sits going into 2026, vertical by vertical. Written from the companies we cover and the cycles they are standing in.
Sector by sector.
Our view across the coverage universe, from design through disposal. Each vertical hands demand to the next, which is why we read them together.
Design it · Engineering
The strongest sub sector under coverage. WSP is growing power and energy at double digits following the TRC acquisition. AtkinsRéalis is tracking 5-7% organic growth with nuclear revenue targets raised to $2.6-3.0B by 2027. Stantec sees double digit growth in US water and power. Defence is an emerging tailwind as Canadian government spending accelerates, and healthy balance sheets support continued consolidation.
Build it · Construction
Selective strength. Canadian nation building is a genuine tailwind, with Aecon’s backlog up 12% and nuclear at 28% of construction revenue. US specialty contractors including EMCOR, Quanta and MYR are benefiting from power and data centre work. General construction faces margin pressure as fixed price legacy contracts roll off. Infrastructure is outperforming private commercial.
Equip it · Equipment and rental
Toromont is seeing product support demand ramp from fleet deliveries two to three years ago, with mining constructive across several commodities. The AVL generator business is at full capacity in Hamilton, serving data centre backup power along the eastern seaboard. Finning’s Canadian business faces softer construction demand, offset by mining. United Rentals continues to benefit from infrastructure and industrial capital spending.
Maintain it · Facilities and asset management
The most defensively positioned bucket. Comfort Systems, IES Holdings and EMCOR are executing on data centre electrical and mechanical work alongside a recurring maintenance base. Dexterra’s workforce accommodation business is exposed to Canadian resource activity. APi Group draws more than 85% of revenue from recurring fire protection and life safety inspection, which gives earnings visibility across cycles. This sub sector rewards incumbency and technical certification.
Clean it up · Environmental and waste
The most compelling long term structural thesis. Waste Connections is tracking 5% core price growth, with routing and pricing technology expected to add 100bps of margin by 2028. GFL’s environmental services platform continues to benefit from pricing discipline and route density. RNG projects are ramping with meaningful EBITDA contribution expected from 2027. For smaller operators in mine water treatment, clean combustion and industrial wastewater, regulatory tailwinds are accelerating demand with no comparable increase in the supply of qualified operators.
An opportune year for domestic dealmaking.
Lower rates, a Canada first investment agenda, stronger valuations and the stabilization after tariff uncertainty are converging. 59% of Canadian valuation professionals expect activity to increase in 2026, driven by fundamentals rather than distress.
Where the activity is
Construction and engineering, logistics, oil and gas services, advanced manufacturing and business services.
Who is buying
Well capitalized strategics and private equity platforms, after service oriented, asset light businesses with recurring revenue.
What they will pay
Public multiples compressed 15-20% from 2025 peaks, leaving a real gap against private transaction precedents.
What it means for you
Buyers pay for businesses they can diligence quickly. Reliable reporting is worth a full turn of EBITDA at exit, and it takes more than a year to build.
Published for information only. Not investment advice or a recommendation to buy or sell any security. BluPrint Capital and its principals may hold positions in the companies discussed.
What does this mean for your business?
We work with industrial companies on roll ups, restructurings, turnarounds and the strategic finance seat.