Commercial industry trends and outlooks for 2026

Nationwide’s latest research reveals cautious optimism among business owners and insurance agents heading into 2026. Our Economic Pressures Survey shows 56% of small business owners and 69% of middle-market owners expect the U.S. economy to improve. However, according to the survey challenges remain:  

• Inflation and rising costs are top concerns for over half of business owners (55% SBOs, 56% MMBOs). 

• High interest rates worry 39% of small businesses and 46% of middle-market businesses. 

• Tariffs are squeezing margins – 38% of SBOs and 51% of MMBOs are concerned about raw material costs.¹  

At the same time, opportunities are emerging. Tax incentives and falling interest rates could spark growth later in 2026. Many businesses are also turning to AI and automation to cut costs and improve efficiency – 77% of middle-market businesses and 44% of small businesses are already investing in AI, and over 90% report positive ROI. ¹ 

Taking a closer look at individual industries, we see similar challenges and opportunities. 

Construction 

Construction slowed in 2025 due to high costs and policy uncertainty, but activity should pick up later in 2026 if interest rates continue to ease and as tax incentives kick in.² Still, 72% of contractors report worsening labor shortages, and tariffs on steel and lumber are driving up material costs. Nationwide’s construction team can help contractors manage these risks with tailored coverage offerings and safety programs. 

Manufacturing

Manufacturers have been operating in a prolonged slump, with the ISM index signaling contraction for much of the past three years. Tariff‑driven cost pressure on key inputs such as metals and plastics, combined with persistent labor constraints, continues to challenge the sector. Still, technology adoption and reshoring are emerging bright spots. Agency Forward® highlights manufacturing’s scale – $2.93 trillion in annual output and more than 13 million U.S. workers – along with rising cost pressures, a 3.3% increase in producer prices (2024), and growing workforce needs (a net 3.8 million workers required by 2033) as context for this shift.³ In response, many manufacturers are leaning into automation and digital tools to improve efficiency, while more than one‑third report shifting or considering shifting supply chains closer to the U.S. to reduce trade‑related risk.⁴ Broader Nationwide research shows strong momentum behind these efforts, with 77% of middle‑market businesses and 44% of small businesses investing in AI. Nationwide supports manufacturers with solutions designed to address supply‑chain disruptions and evolving technology risks. 

Human services and nonprofits

Demand for social services and mental health care is growing, but Medicaid cuts under OBBBA – up to 20% in some regions – are creating financial strain.⁵ Many nonprofits are turning to private donations and tax incentives to fill gaps. As funding and workforce pressures intensify, many human services and nonprofit organizations are prioritizing resilience and continuity planning. Nationwide supports these efforts with industry‑specific risk management strategies designed to help protect staff, volunteers and facilities, strengthen workplace safety practices, and reduce exposure to liability and operational disruptions. These solutions help organizations stay focused on their mission while navigating an increasingly complex operating environment. 

Senior living

The U.S. population is aging fast – 18 million more people over 75 in the next 15 years – which means strong demand for senior care. Occupancy rates are back to normal, but Medicaid cuts and staffing shortages remain big challenges. Construction of new facilities could rebound in 2026.⁶ Nationwide provides coverage and risk solutions for senior living operators facing these pressures. 

Real estate

Commercial real estate remains mixed as 2026 begins: industrial continues to lead on the back of logistics demand (national net absorption reached 45.1M sq. ft. in Q3, up 33% YoY), office has shown signs of stabilization (national vacancy ~20.7% in Q3 with improving absorption and declining sublease availability), retail vacancy is near historic lows (~5.8%) even as rent growth softens, and multifamily demand stayed firm (>102,000 units absorbed in Q3; vacancy ~9.0% as new construction fell 27% YoY).⁷ See Agency Forward’s deep dive for trends and risk‑management implications for property owners.⁸  

Conclusion

Even as optimism builds for 2026, many business owners continue to expect insurance costs and overall expenses to rise, making proactive planning essential amid ongoing workforce challenges, inflationary pressure and tariff uncertainty (Nationwide Economic Pressures Survey, Q4 2025). Recent Agency Forward® analysis highlights how sweeping tariff changes and ongoing policy uncertainty are reshaping costs, sourcing and inventory strategies—particularly for retailers⁹, where duties have increased sharply and added billions in cost across key segments. Against this backdrop, Nationwide’s industry‑specific expertise, backed by dedicated underwriters and risk management specialists, helps businesses reduce losses, adapt to changing conditions and stay prepared for what’s next.