As of Summer 2025, the U.S. construction industry is transitioning into a phase of tempered expansion after two consecutive years of significant growth.

Following a 6.6% increase in total output in 2024, current projections point to a slower growth rate of approximately 1.4% in 2025. This adjustment reflects tighter lending conditions, inflationary pressure on materials and labor, and cautious investor sentiment.
Market activity remains mixed across sectors. Modest gains (approximately 1.5% year-over-year) are expected in commercial construction, with stronger growth on the horizon for 2026. Industrial construction, meanwhile, is seeing continued contraction as developers recalibrate in response to overbuilding during the pandemic recovery. Institutional work, especially in healthcare and higher education, is holding steady, supported by long-term capital plans and government appropriations.
Federal infrastructure programs continue to provide critical support, with funding directed toward transportation, energy, and utilities sustaining market momentum in key metro regions. Nevertheless, labor shortages and cost escalation continue to challenge delivery teams, extending schedules and compressing margins on both public and private projects.
Overall, the U.S. construction industry in 2025 presents a mixed landscape characterized by cautious optimism, selective sector growth, and reliance on public investment to maintain momentum in the face of broader economic uncertainty.