The corporate surety market appears to be holding steady as 2026 approaches – despite some recent slowdowns in the construction industry and ongoing uncertainty about the national economic climate.
Key trends impacting the market include:
- Continued success: In 2024, the global surety market grew nearly 7 percent to $19.62 billion. And while claims have risen, they remain comparatively low – data from the Surety and Fidelity Association of America shows last year, losses among the top surety bond companies totaled nearly $2.3 billion, for a ratio of 23.2 percent.
- Federal funding: Funding from both the Bipartisan Infrastructure Law, which supports upgrades to roads and bridges, and the CHIPS Act, which supports the expansion of semiconductor manufacturing facilities, have driven increased construction – and increased surety activity.
- Construction industry fluctuations: Despite the influx of federal funding, in 2025, the construction industry showed signs of cooling off in certain areas.
- Fewer job openings: Data from national construction industry trade association Associated Builders and Contractors showed construction job openings fell sharply in August, to the lowest rate in almost a decade.
- Reduced nonresidential construction: The backlog – or contracted future work – for commercial, heavy industrial and institutional construction has slowly declined during the past year, as has backlog for firms with revenue between $30 million and $100 million. A 2025 industry trends report from Nationwide attributes this slowdown to concerns about evolving policies and high interest rates.
- Areas of growth: There are a few bright spots, however. For infrastructure construction, backlog has steadily increased, and in August, backlog for large contractors hit a two-year high. Data centers are helping drive backlog growth: In September, 1 in 5 contractors was under contract to work on one of these projects.
- Uncertainty surrounding tariffs: A report from the National Association of Surety Bond Producers showed material pricing rose steadily in 2025 – in some cases, almost 50 percent – in part because of tariffs. In addition to raising prices on imported material, tariffs also reduce competition, which can increase both domestic pricing and wait times for materials.
- Overall confidence index: Despite these headwinds, confidence in continued growth for the industry – at least through the first quarter of 2026 – remains strong. The September Associated Builders and Contractors Construction Confidence Index projected increases in both staffing and profit margins.
2026 outlook
Looking ahead to 2026, the contract surety market is healthy and stable. One item to watch in the coming year is bigger project sizes leading to larger claims. That said, there continues to be ample capacity in the marketplace, and added underwriting scrutiny is occurring only on a case-by-case basis.
The corporate surety team at Schauer Group can help your firm navigate the surety marketplace. If you’d like to discuss these issues further, please reach out to a Schauer Group advisor.
