LOS ANGELES, CA -- ServiceTitan, the software platform that powers the trades, released its 2026 Commercial Specialty Contractor Industry Report, a survey of more than 1,000 commercial construction leaders.

The report finds that AI adoption is accelerating rapidly across the industry, with 38 percent of contractors now reporting measurable business impact from AI, up from 17 percent in 2025.

“The next AI leaders in the commercial and construction markets will be defined by how seamlessly intelligence is embedded across the entire workflow,” said Alex Kablanian, SVP and General Manager of Commercial & Construction Markets at ServiceTitan. “Companies that unify their systems, sharpen execution, use real-time data to protect margins, and accelerate cash flow will transform operational complexity into a competitive advantage.”

AI Moves from Experimentation to Measurable Business Impact
AI is quickly moving from early experimentation to real business results. Contractors are applying AI across high-value areas, including cost estimation and budgeting (24 percent) and bid management (22 percent). Rather than replacing core systems, AI is being used to enhance day-to-day operations and improve decision-making. Many contractors expect AI to play a larger role across the full project lifecycle, beyond just bidding and planning.

Contractors Balance Strong Demand with Rising Cost Pressures
Contractors are entering 2026 with steady demand and strong project pipelines. Forty-one percent report feeling optimistic about market conditions, while 38 percent remain neutral. More than three-quarters of contractors report at least nine months of secured work, including 41 percent with more than a year of backlog.

At the same time, rising labor and overhead costs, skilled labor shortages, and increasing material prices continue to put pressure on profitability. Seventy-one percent of contractors report rising wages, up from 55 percent in 2025.

Profitability Becomes a Key Focus
With greater visibility into future revenue, contractors are placing increased emphasis on profitability. Top priorities for 2026 include growing revenue through new projects (61 percent) and increasing project margins (45 percent).

To protect profits, contractors are focused on improving billing timelines (57 percent) and closely managing labor costs (38 percent).

Contractors Take a More Proactive Approach to Managing Cash Flow
Contractors are also adjusting how they manage cash flow as project costs rise. Sixty-seven percent of firms report using lines of credit to fund materials, while 56 percent are negotiating extended supplier terms to better align costs with payment timelines.

Change orders, which increase project value by 5–20 percent for most firms (59 percent), are reinforcing the need for stronger documentation and financial oversight. As a result, contractors are increasingly turning to technology to improve visibility into project performance and financial health.

Platform Consolidation Emerges as the Next Efficiency Lever
The report highlights a fragmented technology landscape across commercial construction firms, limiting visibility across projects and financial performance. Only 20 percent of contractors report operating on a single platform, while many rely on multiple systems across accounting, project management, and estimating tools. This creates an opportunity for contractors to consolidate systems and adopt more integrated platforms that streamline workflows and improve operational visibility.

To view the full findings and key takeaways, download ServiceTitan’s 2026 Commercial Specialty Contractor Industry Report here.