ONSITEVIEW BlogWhat is the Outlook for Commercial Construction in 2025?
What is the Outlook for Commercial Construction in 2025?
December 17, 2024
The outlook for commercial construction in 2025 indicates a period of moderate growth, influenced by various economic and industry-specific factors. Key projections include:
Economic Conditions:
- Anticipated reductions in interest rates and easing inflation are expected to lower financing costs, potentially stimulating both public and private sector investments in construction projects.
Sector-Specific Growth:
- Significant increases are projected in certain sectors, including a 56% rise in military project spending, a nearly 28% increase in hotel projects, and a 25% uptick in shopping and retail construction.
Construction Starts:
- Overall U.S. construction starts are forecasted to grow by 8.5%, driven by a positive economic outlook, strong government spending, and increased demand in sectors such as manufacturing and infrastructure.
Spending Growth:
- While construction spending is expected to continue, the pace may slow to around 2% in 2025 due to ongoing market challenges.
Cost Considerations:
- After a period of stabilization, construction materials and costs are poised to resume growth, with cost increases projected between 5% and 7% in 2025.
Labor Market:
- The industry continues to face challenges in sourcing skilled labor, particularly for specialized roles, which could impact project timelines and costs.
In summary, while the commercial construction sector is expected to experience growth in 2025, stakeholders should remain attentive to economic fluctuations, cost escalations, and labor market constraints that may influence project planning and execution.