The near-term prospects for the industry softened as Dodge Construction Network’s (DCN’s) total construction new starts metric edged down by 6.0 percent in January 2025. High construction costs and labor shortages were cited as notable barriers to growth.

Encouragingly though, DCN’s momentum index grew by 5.6 percent over the same period, indicating non-residential prospects could be brighter in 12-months’ time. However, the index’s performance has been skewed by a burst of data center activity recently.

Momentum aside, the landscape is not without its complexities. The American Institute of Architects’ (AIA’s) Architectural Billings Index declined to 44.1 in December 2024 from 49.6 in the prior month, marking another notable decrease in firm billings. In addition to this, many firms surveyed by the AIA report stated that budget constraints have led to several stalled, delayed or cancelled projects.

There is, however, a sense of cautious optimism building across many industry operatives. Engineering News-Record’s (ENR’s) Confidence Index rose to 61 in Q1 2025, its highest rating since Q1 2022, buoyed by optimism following the US presidential election outcome. And while the Construction Financial Management Association’s Confindex measure declined by 2.6 percent to 113 in Q1 2025, it still remains above the 100-point watermark that demonstrates growth.

Despite positive sentiment, supply chain disruptions and labor availability, worsened by tariffs and immigration policies, threaten growth prospects.