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The end of Q3 is upon us, and many contractors are starting to strategize for 2027. To help, this edition has how-tos on assessing the true value of AI before you buy and keeping your backlog from eating up available cash. You also get insights into the construction economy and a look at how an ancient Navajo building material is used today.
QUICK HITS
» Hammer time! Redditors are talking about titanium hammers this week — are you pro or con? 🔨
» Helping hands. Students in Hamilton High’s SPARK Construction Program learn while building houses in the community.
» Hang it up. Maybe it’s time to retire that tattered paper calendar from the building supply store and replace it with one of these.
» Hey, watch it! The Bricking It crew uses their signature dance moves to deal with a tight squeeze at the jobsite.
INDUSTRY INSIGHTS
FINANCIAL STRATEGY
Financial discipline keeps cash flowing
A strong backlog is nice until you start burning cash faster than clients are paying. Ease the impact by getting proactive about working capital. Nathan Mor of Coastal Debt Resolve suggests starting with a rolling 13-week cash flow forecast to identify possible issues now. Then scaffold that cash flow. Get a line of credit before you need one and negotiate stronger contract terms to include upfront deposits or mobilization payments.
“The companies that consistently outperform their competitors are not simply the ones that win the most bids,” he notes, “they are the ones that manage liquidity with the same discipline they apply to estimating, scheduling and project execution.”
Why it matters: Business sustainability is a combination of work under contract and cash flow management. Financial discipline moves the odds in your favor. Talk to your business banker and CPA about how you can manage cash flow more effectively. (ForConstructionPros.com)
CONSTRUCTION ECONOMY
Nonresidential starts reach near-record in August
This year continues to be a good one for the nonresidential sector. A ConstructConnect analysis reveals that 2026 has four of the six biggest single-month spending figures ever, including the top two spots. August’s total nonresidential construction starts reached $99.0 billion, the second-highest on record.
“While many subcategories are pointing to positive annual spending growth, the majority of increased spending year-to-date has originated from offices including data centers, hospitals and power infrastructure,” notes the firm’s chief economist, Michael Guckes. Residential starts continue to flag, falling 14.9% from July to $20.9 billion and 8.8% under 2025’s YTD velocity year to date.
Why it matters: Despite attempts to jump-start housing development, the best opportunities continue to be in nonresidential, particularly sectors benefiting from data center activity and the healthcare needs of an aging population. Contractors who can add more commercial and infrastructure work may want to plan a bigger bet on those sectors for 2027. (ConstructConnect)
INNOVATION STRATEGY
How to assess the value of AI
Thinking about investing in construction AI? Before you do, check out this approach to evaluating its potential impact: Value = Technology x Adoption x Strategic Alignment. “Technology” encompasses AI and other innovations, “adoption” represents if/how people will use it, and “strategic alignment” is how much the problems solved actually drive strategic priorities, operational efficiencies and financial performance.
“The key to the equation is the multiplication signs: all three factors multiply, so if any one of them is near zero, the value collapses,” write David Rogers of Columbia Business School and Krishnan Sankaranarayanan of Eastman. “Think of three scenarios: a brilliant model that lacks the right data; an elegant solution that no one adopts; a powerful tool aimed at an irrelevant problem. In each scenario, AI generates zero value to the firm.”
Why it matters: You can’t afford to spend money on AI without carefully considering whether it will be used (or used correctly) to fix issues that hold your business back. Quantifying its value before you buy is the best way to get the most for your money. (Harvard Business Review)
THE PUNCHLIST
THE BLUEPRINT
Building for climate resilience
In the Southwest, it's getting warmer and warmer. Folks down in Phoenix, they're constantly blasting their AC to remain cool. They're working against the Earth. Here, we're working with the Earth.”
HVAC is serious business in hotter climes. In NOVA’s “Knowledge Keepers”, Roberto Nutlouis demonstrates how ancient Diné-Navajo building practices and materials provide a natural solution to heating and cooling challenges. His team uses earthen exterior plaster, made of clay, sand, water and straw, to coat their traditional dwellings, called hogans. “Not only does it blend in with the surrounding environment, it also gives it a thermal energy.” The plaster’s high thermal mass seals warm air in during winter and keeps it out during summer.
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The Level is curated and written by Margot Lester and edited by Bianca Prieto
