The Zacks Building Products - Heavy Construction industry continues to grapple with tariff-related uncertainty and cost pressures, inflation and ongoing labor constraints, all of which can delay projects and compress margins. These macro headwinds have clouded near-term visibility and kept investor sentiment cautious, even as execution risks remain elevated across large, complex infrastructure builds.

That said, the longer-term outlook remains compelling. A generational U.S. infrastructure push—spanning transportation upgrades, broadband expansion and clean-energy initiatives—is creating a deep, multi-year project pipeline. At the same time, rapid data-center expansion is driving incremental demand for advanced civil and electrical infrastructure. Within this backdrop, established players such as MasTec (MTZ Quick QuoteMTZ - Free Report) , Dycom Industries (DY Quick QuoteDY - Free Report) , Tutor Perini Corporation (TPC Quick QuoteTPC - Free Report) and Orion Group Holdings, Inc. (ORN Quick QuoteORN - Free Report) are well-positioned to benefit, leveraging diversified service offerings, technical depth and disciplined project execution to capitalize on the industry’s next phase of expansion.

Industry Description

The Zacks Building Products - Heavy Construction industry consists of mechanical and electrical construction, industrial and energy infrastructure as well as building service providers. This industry comprises heavy civil construction companies that specialize in the building and reconstruction of transportation projects, including highways, roads, bridges, airfields, ports and light rail. The companies serve commercial, industrial, utility and institutional clients. The industry players are engaged in the engineering, construction and maintenance of communications infrastructure, oil and natural gas pipelines, as well as processing facilities for energy and utility industries. These firms are also engaged in mining and dredging services in the United States and internationally.

3 Trends Shaping the Future of the Heavy Construction Industry

Macroeconomic Challenges: The biggest headwinds for the industry players are centered around macroeconomic challenges and labor availability. In addition to a tight labor market, a rise in raw material costs is a concern. Meanwhile, the businesses of the industry players are susceptible to the cyclical nature of the markets in which clients operate and are dependent on the timing and funding of new awards. Hence, volatility in credits and operating risks associated with economic downturns are pressing concerns. Presently, the macro environment is marked by economic and policy uncertainty, including potential shifts in interest rates, inflation and lingering volatility in equity markets—all of which can raise the companies' borrowing costs. The industry players have been specifically citing concerns around evolving tariff and trade policies—such as anti-dumping duties on Chinese imports—that could affect materials pricing and project economics. The companies remain sensitive to changes in customer capital expenditure budgets and regulatory frameworks.

Data Centers, Grid, and Industrialized Infrastructure: A central structural driver into 2026 is the AI/data-center buildout. The data center boom is fueling growth for U.S. heavy construction firms by driving demand for large-scale site development, power infrastructure, and specialized mechanical systems. These long-term, high-value projects enhance backlog visibility, regional expansion, and margin performance. Overall, the data center boom, fueled by AI and digital infrastructure needs, is reshaping the U.S. heavy construction landscape, favoring firms with technical expertise, national reach, and the ability to execute high-value, mission-critical infrastructure. On the power side, the companies frame the grid as a multi-year CapEx cycle driven by load growth against aging infrastructure, expecting substantial investment across transmission, substations, distribution and new generation capacity. The U.S. administration’s ambitious infrastructure plan, aimed at creating modern, sustainable infrastructure and a cleaner future, is set to have significant implications for the economy and the construction industry over the next five years. By laying the groundwork for sustainable growth, the plan seeks to mitigate the effects of climate change and enhance public health, ensuring access to clean air and water. This expansive infrastructure agenda could be a major boost for companies involved in construction and related sectors.

Solid Inorganic Moves & Renewable Business Prospects: Acquisitions have been companies’ preferred mode of solidifying product portfolios and leveraging new business opportunities. Again, due to increased renewable project activity and the expansion of services in biomass and other smaller production facilities, the power generation and industrial construction market is poised to see sizable growth. The companies are well-positioned to gain from the renewable energy drive of the pro-environmental Biden administration. The development and deployment of technology solutions across the full spectrum of decarbonization efforts, comprising all facets of infrastructure for providing carbon-free energy solutions, should benefit the companies going forward.

Zacks Industry Rank Indicates Dull Prospects

The Zacks Building Products - Heavy Construction industry is a nine-stock group within the broader Zacks Construction sector. The industry currently carries a Zacks Industry Rank #188, which places it in the bottom 23% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a lower earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since November 2025, the industry’s earnings estimates for 2026 have declined to $7.70 per share from $7.73.

Despite the industry’s cloudy near-term outlook, we highlight a few stocks that investors may consider adding to their portfolios. Before that, it is useful to examine the industry’s shareholder returns and current valuation backdrop.

Industry Outperforms Sector & the S&P 500

The Zacks Building Products - Heavy Construction industry has performed better than the broader Zacks Construction sector and the Zacks S&P 500 Composite over the past year.

Stocks in this industry have collectively gained 39% compared with the broader sector’s 2.6% rise. Meanwhile, the S&P 500 has jumped 13.6% in the said period.

One-Year Price Performance

Industry's Current Valuation

On the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing heavy construction stocks, the industry is currently trading at 23.48 versus the S&P 500’s 22.81 and the sector’s 20.61.

Over the past five years, the industry has traded as high as 23.48X, as low as 11.39X and at a median of 16.71X, as the chart below shows.

Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500

Industry’s P/E Ratio (Forward 12-Month) Versus Sector

4 Heavy Construction Stocks to Keep an Eye On

Here, we have discussed four stocks from the industry that have solid growth potential. 

Tutor Perini: Based in Sylmar, CA, Tutor Perini is a global construction services provider serving public and private clients. Tutor Perini has favorable long-term growth prospects driven by a robust pipeline of large, complex infrastructure and building projects across key U.S. regions and select international markets. Sustained federal, state and local funding for transportation, transit, healthcare and defense-related infrastructure supports multi-year demand visibility. The company’s focus on bidding selectively for projects with favorable risk profiles, limited competition and higher-margin structures enhances execution quality and profitability potential. Growth is further supported by increased activity on newer, large-scale civil and building projects moving from preconstruction into full execution, along with expanding opportunities for its specialty contracting units. Strong exposure to California, New York, the Midwest and Indo-Pacific markets positions Tutor Perini to benefit from long-duration infrastructure modernization trends.

Tutor Perini, currently carrying a Zacks Rank #3 (Hold), has gained a significant 177% over the past year. Earnings estimates for 2026 have remained unchanged at $4.72 per share over the past 60 days. Earnings for 2026 are expected to grow 17.7% from a year ago. Tutor Perini surpassed earnings estimates in all the trailing three quarters, with the average surprise being 396.4%. Again, it carries an impressive VGM Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Price and Consensus: TPC

Dycom Industries: Headquartered in Palm Beach Gardens, FL, this is a specialty contracting firm operating in the telecom industry. Dycom has a solid long-term growth outlook, supported by multiple structural demand drivers rather than short-term cycle effects. The company is well positioned to benefit from accelerating fiber-to-the-home deployments, large-scale data center and AI-driven network builds and rising hyperscaler spending on long-haul and middle-mile connectivity. Federal broadband initiatives, particularly the BEAD program, are expected to unlock multi-year infrastructure spending across rural and underserved regions. Dycom’s expanding service and maintenance portfolio adds recurring, less cyclical revenue visibility. Strategically, the acquisition of Power Solutions broadens its exposure to mission-critical data center electrical work, deepens relationships with hyperscalers, and enhances its skilled labor base, strengthening its ability to execute complex, high-value digital infrastructure projects over the next decade.

Dycom, currently carrying a Zacks Rank #3, has gained 95.8% over the past year. Earnings estimates for fiscal 2026 and 2027 have increased to $10.71 per share from $10.57 and $14.45 per share from $13.44 over the past 60 days. The estimated value for fiscal 2027 is expected to increase 35% from the previous year. DY surpassed earnings estimates in all the trailing four quarters, with the average surprise being 22.7%.

Price and Consensus: DY

MasTec: Based in Coral Gables, FL, this is a leading infrastructure construction company operating mainly throughout North America. MasTec has strong long-term growth prospects supported by broad-based infrastructure demand across communications, energy and power markets. Accelerating fiber and wireless network investments, driven by broadband expansion, AI-related data center connectivity and middle-mile buildouts, provides sustained tailwinds for its communications business. Power delivery growth is underpinned by rising grid modernization needs, load growth and large-scale transmission, substation and distribution investments. Clean energy demand, including renewable generation and related infrastructure, remains a key multi-year driver. Additionally, improving pipeline infrastructure activity tied to natural gas, LNG exports and gas-fired power generation enhances visibility beyond near-term cycles, reinforcing MasTec’s diversified, multi-year growth runway.

MasTec, currently carrying a Zacks Rank #3, has gained 53.3% over the past year. Earnings estimates for 2026 have remained unchanged at $8.20 per share over the past 60 days. Yet, earnings for 2026 are expected to grow 28.3% from a year ago. MTZ surpassed earnings estimates in all the trailing four quarters, with the average surprise being 18.9%.

Price and Consensus: MTZ

Orion Group: Based in Houston, TX, this company is a specialty construction firm serving infrastructure, industrial and building markets across North America and the Caribbean. Orion Group has solid long-term growth prospects driven by rising investment in marine, port and coastal infrastructure, supported by increased federal and defense-related spending. Expansion of U.S. Navy and Indo-Pacific military infrastructure programs, including large multi-award contract vehicles, provides multi-year bidding visibility. Growing demand for dredging, port modernization and marine maintenance supports stable activity across regions. In concrete, accelerating data center construction, reshoring-driven industrial projects and healthcare facilities create sustained private-sector demand. Expanded bonding capacity, disciplined project selection and strategic geographic expansion position Orion to capitalize on these structural tailwinds over the coming years.

Orion Group, currently carrying a Zacks Rank #3, has gained 34.4% over the past year. Earnings estimates for 2026 have remained unchanged at 27 cents per share over the past 60 days. Yet, earnings for 2026 are expected to grow 44.7% from a year ago. ORN surpassed earnings estimates in all the trailing four quarters, with the average surprise being 241.4%. Again, it carries an impressive VGM Score of A.

Price and Consensus: ORN