The latest read on the US economy points to moderate growth with a continued focus on global trade and controlling inflation. Consumer spending remains solid, but dampened consumer confidence and policy considerations around interest rates and tariff measures could reshape the landscape in 2025 and beyond.

Within this broader macro-environment, the construction industry is navigating both opportunities and challenges. Commercial and residential developments have shown some recovery, although this has differed for each region. Institutional activity has been the backbone of many regions even while other industries vary in performance. Public infrastructure projects further reinforce a healthy construction pipeline, particularly for transportation and energy upgrades.

On the labor cost front, the search for skilled workers continues to be an issue, while the new administration’s deportation efforts may exacerbate labor shortages in certain trades. Material costs continue to be influenced by fluctuating commodity prices, along with supply chain pressures that occasionally disrupt the flow of critical materials. These factors underline the importance of strategic sourcing and a keen eye on vendor relationships.

Industry pricing has been under inflationary pressure due to speculation about tariffs and their eventual impact. As a result, costs are expected to rise, and risk allowances will expand. Increased build costs could potentially derail investment and construction spending and the impact of market and trade conditions on growth is going to be the key undercurrent of 2025.

Trade disputes have complicated market proceedings, but industry sentiment remains positive and pragmatic, with stakeholders monitoring policy shifts, global trends and costs.