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Macro Economy•14 April 2026•

1 min read

US Retail Construction Activity Slumps Below 10-Year Average in Q1 2026

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Key Facts

1U.S. retail construction activity totaled 64.2 million square feet in Q1 2026, falling below the 10-year average.

2Texas markets including Dallas, Houston, and Austin are leading new construction with significant preleased pipelines.

3Key headwinds include elevated costs for land, materials, labor, and debt, alongside e-commerce competition.

U.S. retail construction activity experienced a significant slowdown in the first quarter of 2026, with total projects reaching 64.2 million square feet, falling below the 10-year historical average. The sector is grappling with multiple headwinds, including elevated costs for land, materials, and labor, alongside high debt servicing costs and persistent competition from e-commerce. Despite the national cooling, Texas markets such as Dallas, Houston, and Austin continue to lead new development, supported by robust pre-leasing activity. This divergence highlights a strategic shift where developers are prioritizing high-growth regions while remaining cautious elsewhere due to restrictive monetary conditions. The stagnation in physical retail footprints reflects broader macroeconomic pressures and shifting consumer habits. Consequently, market participants are closely monitoring real estate ETFs and construction indices for further signs of volatility.