Navigating A Complex and Uncertain Economic Landscape

As Q2 wraps up, the latest Construction Economic Report offers insights to guide your business decisions in the coming months. Stay ahead with key trends and data that directly impact the construction industry.

The Q2 2025 Construction Economic Report delivers a comprehensive overview of the economic landscape. Highlights include:
  • Economic Volatility and Inflation: Real GDP growth is projected to slow to as low as 1.3% in Q3, largely due to tariff uncertainty disrupting supply chains and delaying projects. Inflation is rising, reaching 2.7% and expected to worsen to 3.0-3.5% by year-end, keeping the Federal Reserve on a cautious “on pause” stance regarding interest rate cuts despite market expectations.
  • Divergent Construction Sector Performance: Residential construction continues to face significant headwinds, with spending down 6.7% year-over-year and a 9.8-month supply of new homes, indicating a slowdown expected to persist into early 2026. Conversely, the non-residential sector, particularly manufacturing and power, remains strong and is poised for substantial future growth, driven by policy initiatives.
  • Massive Non-Residential Investment Driven by Policy: The “One Big Beautiful Bill Act” (OBBBA) is set to unleash an estimated $5 trillion to $8 trillion in non-residential investment, especially in industrial and energy projects, with incentives requiring projects to commence by early 2029 and complete by end of 2030. This is expected to significantly boost annual industrial construction spending.
  • Deepening Labor and Material Challenges: The construction industry faces a critical and intensifying labor shortage due to an aging workforce and skills mismatch, which will be exacerbated by the anticipated non-residential boom. Persistent tariff threats (e.g., 50% on steel/aluminum, potential for copper) continue to create price uncertainty and disrupt material supply chains, delaying projects.

Download the full report to learn more.