Stay Ahead with the Latest Construction Insights and Trends
Written by MOCA Systems, Inc., Principal, Chief Construction Economist, Brandon Michalski, this quarter’s edition discusses the U.S. nonresidential construction market softening amid trade uncertainty, inflationary input costs, and shifting federal priorities.
This special report provides the most comprehensive snapshot of the U.S. data center construction market through 2030.
Written by MOCA Systems, Inc., Principal, Construction Economist, Brandon Michalski, this quarter’s edition discusses the U.S. nonresidential construction market softening amid trade uncertainty, inflationary input costs, and shifting federal priorities.
U.S. construction is beginning to feel the delayed impact of rising rates, tightening capital, and trade uncertainty, with growth expected to slow and costs to rise in 2025. MSI Economics forecasts elevated risk-driven inflation led by workforce constraints and material availability.
The Q1 2025 Today’s Construction Economy report analyzes key trends affecting the U.S. nonresidential construction sector, highlighting slowing spending growth, shifting labor dynamics, and emerging cost risks.
The US nonresidential construction sector faced challenges in 3Q 2024 due to natural disaster recovery, a brief port strike, and a tense election cycle. While interest rates, materials, and equipment costs are easing; labor costs continue to rise, making the project pipeline more unpredictable.
U.S. nonresidential construction spend is elevated but slowing, backlogs remain high, and the project pipeline has shifted into low gear.
In the first quarter of 2024 the U.S. construction market has continued to reflect strong fundamentals with some indicators softening. Labor demand and wages continue to steadily climb as projects continue to outpace supply.
Labor continues to be the cost driver, and while the lack of labor availability is holding up some projects, sales are still increasing. Talk of recession is ebbing, although new starts are down, and the nonresidential backlog has been decreasing for the past four months.
The much-anticipated recession has not arrived, and an increasing number feel it won’t – we are more likely to be in for a soft landing.
Three years after policy decisions to address COVID induced a severe recession, we have recovered. The pendulum has swung 180 degrees, and we are now confronted with raging inflation and, again, real possibilities of another recession.
Inflation has shown signs of cooling off both in the general economy and in construction inputs and selling prices. Nowadays, the biggest headache for construction firms and owners is the state of labor availability at all skill levels.
