US Construction Outlook Q4 2025

HIGH-LEVEL OVERVIEW: Improving confidence despite continuing cost and labor pressures.

Forecast highlights

• Total nominal put-in-place construction is projected to decline 1.3% in 2025, with stronger growth expected later in Trump’s term. Federally funded construction will rise 6.6%, with some activity also set for state and local projects, expected to grow 2.6%. Private investment is set to contract as tariff uncertainty weigh on spending.

• Non-residential infrastructure will remain the fastest-growing segment in 2025, with 2.6% growth driven by supportive regulation, fiscal stimulus, and private investment. In contrast, non-residential building is likely to decline 2.0% before returning to growth in 2026 as business confidence improves. Residential building is projected to fall 2.9% in 2025 amid still elevated mortgage costs but more benign interest rates. Growth should strengthen from 2026 as lower rates support multi-family housing. Over the longer term, demographic decline and tighter immigration policies could constrain labor supply and weigh on demand.

• We forecast the US construction price deflator will increase by 0.7% in 2025, and 1.2% in 2026, as recent China–US trade developments have stabilized materials prices.

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