The State of the Industry Q&A
Focusing on reflection, lessons learned, outlooks, education, NIA involvement, and talent management, NIA asked four members to share their opinions on their sectors
and the industry.
Q: What were the biggest opportunities and/or challenges for the mechanical insulation industry in 2025? How about for your sector?
WALLY: Managing supply was the biggest challenge in 2025, with elevated pipe insulation demand driven by large “mega” projects led by data centers. The industry has made strides in terms of forecasting and planning in advance, improving project management to keep projects on schedule.
KATIE: As I looked deeper into opportunities and challenges, it’s easy to talk about the same everyday problems we all face. No matter the size of your company, the challenges remain the same: cost of goods and cost of labor. The real challenges are how you overcome them and turn them into opportunities. The increased cost of raw and imported materials has both driven demand and increased price, creating our largest opportunity: efficiency. Manufacturers and suppliers dealing with allocation must increase their efficiency to meet today’s and future demands for products. The cost of labor has been and will always be a make-or-break factor of construction.
DAVID: The largest opportunities I see in the commercial and industrial sectors are tied to the expanding markets. Data centers and the energy expansion to power the sector are the main growth vertical market. In addition, there is expansion in oil and gas in the United States, specifically for liquified natural gas (LNG), and a slight uptick planned for the petrochemical sector. I also see a slight uptick in health-care construction for 2026. Supply allocation challenges in the market create opportunities for companies that can provide innovative alternatives when certain products are not readily available.
JOHN: There are ample opportunities in areas such as data centers, chip facilities, and power generation. However, the biggest challenges facing the industry include labor shortages and material shortages with long lead times.
Q: What is your greatest business lesson learned since 2020?
WALLY: The amount of change we’ve seen over the last number of years highlights the importance of being able to adapt and remain flexible to meet market demands. The ability of our people to identify and adapt to those changes is key to our success.
KATIE: Looking back to 2020, labor cost became an even larger factor, with increased social guidelines slowing workflow and, in some cases, stopping work altogether. Since the Covid era, the importance of training, communication, and education has played a growing role in overcoming a never-before-seen pandemic.
DAVID: You have to be able to move fast, predict what is ahead, and scale your business by expanding and contracting based on the market conditions. Those who do this are rewarded, and those who do not miss the opportunity. You have to “skate to the puck” and move your resources to the geographical markets that are expanding from the markets that are in a decline. More importantly, I spend a large portion of my time focused on building a culture and environment for a great place to work. Focusing on development of future leaders by building the bench is one of the many things that will set companies apart in the near future. We are entering a race for talent with an aging workforce, and the places that provide value beyond a paycheck will surpass the others.
JOHN: In the last few years, the greatest business lessons learned have been the ability to work and meet remotely, and the importance of better planning to deal with material and supply chain shortages. Perhaps most importantly, these challenges revealed the remarkable adaptability of our industry’s people.
Q: What are your predictions or hopes for 2026?
WALLY: The backlog of work in 2026 indicates a continuation of similar market demand as we experienced in 2025. We expect a broadening and strengthening of demand across traditional market segments that have lagged behind the mega projects.
KATIE: My hope for this year is that the younger generations increase their interest in the construction industry. It is our responsibility, through training and increased communication, to attract trade-driven individuals.
DAVID: 2026 will be a challenging year in the residential construction market, which continues to face headwinds. The commercial and industrial sectors are facing declining construction in several vertical markets, which is being replaced by increases in data centers, energy, LNG, and health care.
JOHN: For 2026, the economy is poised to soar to new heights, with power generation and grid improvements serving as a major driver of growth. Artificial intelligence will continue to dominate the headlines, though hopefully with a great deal of scrutiny applied to its development and impact.
Q: How important is continuous industry education? What role does NIA’s Education Center play for your team?
WALLY: Knauf’s sponsorship of NIA’s Education Center is an indication of the importance we place on providing ongoing training support. Our industry is highly technical, and the importance of proper material selection and installation is critical to a project’s success.
KATIE: A well-informed and trained workforce is the only way to achieve efficiency in today’s market. Continued education is the most important resource for preparing your entire staff for what’s to come. Education elevates knowledge and personal well-being, leading to a more productive company and culture.
DAVID: Continuous industry education is extremely important for the development of a bench. NIA’s Education Center is a world-class platform that offers unique education for a new generation for the industry.
JOHN: Just like running a business, if you and your team are not continuously growing and learning, the business is either going backwards or dying, and NIA’s Education Center provides access to specialized courses. In addition, NIA’s Thermal Insulation Inspector Certification™ and the Insulation Energy Appraisal Program™ certification equip our project managers and estimators to perform heat studies and evaluations of existing insulation systems, helping customers identify weaknesses or failures in their systems and understand the potential return on investment when repairs are made.
Q: What strategies have been most effective in attracting and retaining top talent?
WALLY: People are placing increasing importance on a company’s mission and values. Having a compelling case and the ability to clearly articulate that appeals to top talent. Retaining talent is about providing development and opportunities to achieve their career ambitions.
KATIE: Communication, recognition, and a clear path into the future are three keys to retaining your most valued employees. Creating excitement and opportunity will help you attract key hires.
DAVID: I cannot emphasize leadership enough. It is something I am passionate about, and I try to inspire others to focus on their own leadership development. I learned early in my education at Texas A&M University (TAMU) in the Corps of Cadets that leaders are made, not born. My answer to this question is not a strategy, but rather a culture and environment of leadership and development that attracts and retains all talent, not just the top. People follow those who inspire them to be better. It’s not only about fair pay and getting the work done. It’s also about investing time in a person who will, in turn, make you better. Something I learned in my Industrial Distribution classes at TAMU: As a society becomes more high tech, to be an effective leader, you need to become more high touch. When I heard those words, I did not even own a computer. It was 1990, and the course was ENTC 429 Engineering Supervision with Dr. Comstock, who was in his late 60s. These words have been a constant in my career, and I try to live this lesson daily.
JOHN: The most effective strategies for attracting and retaining top talent include incentives such as profit sharing, bonus programs, paid time off, and remote work options. Equally important is treating people with respect and integrity, making them feel like a valued part of the team.