I won’t apologize for my unusual fixation with the economic engine that is being propelled by artificial intelligence. Some of you may have heard me speak at industry conferences over the last year, where I have made around a dozen presentations to national and state associations. My last few slides of every presentation talk about the tailwinds that are behind our economy, which, in my view, is propelling forward so fast that there isn’t any sign of an economic slowdown in the construction industry anytime in the foreseeable future. The only risk I see is geopolitical risk, and even that has been tempered, at least in my mind, as not a very real possibility.
Well, my view has changed even further, and I no longer see just tailwinds; these have become tropical storm force winds.
Just look at one of the most significant measures of the strength of the economy: corporate profits. U.S. business profits are booming no matter how you measure it, with strength in domestic corporate balance sheets hovering above historic norms for more than a decade. New Commerce Department data released at press time showed that total corporate profits in the first quarter of 2026 reached $4.42 trillion on an annualized basis, a jump from $4.35 trillion in the fourth quarter of 2025. Even through more measured lenses, these are outsized margins coming from America’s C-suites.
Corporate profits, on an after-tax basis, represent 12.4 percent of U.S. gross domestic product, the highest reading since the second quarter of 2021, when profits peaked as the Covid-19 pandemic ebbed. It also marks the second-highest quarterly reading ever in the data, which goes back to 1947. Compared against a closely linked measure of U.S. gross domestic income, the total income earned by residents and businesses, corporate profits are even healthier, with a ratio of 12.2 percent—the highest figure since the early 1950s. No matter how you slice it, corporate profits in 2026 are soaring higher from what were already historically high levels as a variety of factors, from the AI boom to improved efficiency, have yielded even better returns for corporate America and its investors.
Profits are also rising, as they did in 2021, at a time of higher inflation, which has squeezed consumers’ pocketbooks for basics like food and gasoline.
And AI is fueling the current profit boom. One key driver of the current uptick in corporate profits is the AI machine, specifically data center spending, which one international bank deemed a “structural tailwind” to the entire economy. The firm went on to report that the U.S. profit cycle—broadening, accelerating, and underpinned by the most ambitious infrastructure investment program in decades—remains the dominant force in global markets and the strongest argument for staying fully invested in equities.
One well-regarded economic consulting firm projects that recent geopolitical developments could pad bottom lines further, writing that a final ceasefire between the U.S. and Iran would be very positive news for global financial markets, with falling gas prices likely to end up directly boosting corporate profit margins.
And is the tailwind soon to be a tropical system blowing behind our economy? Yes, and the driver is the broader economic impact of AI on the United States. This is where the truly staggering numbers are hard to fathom, especially in learning what AI is expected to add to the entire U.S. economy through productivity gains. KPMG estimates rapid AI adoption adds $2.84 trillion to U.S. GDP by 2030 and $3.37 trillion by 2050; PwC projects AI could add up to 15 percent to global GDP by 2035, which translates to roughly $15.7 trillion in new economic output.
In my 53-year career, watching the inventions of the personal computer, cellphones, and the Internet, I believe this is the greatest, transformative economic event of my lifetime. I hope all these smart guys are right … get ready for tropical storm-force tailwinds behind the entire U.S. economy.