2025 Construction Insights: Trends to Watch
POSTED ON January 2, 2025 | BY Zters
The construction industry is the backbone of our society which explains why many economists, analysts, entrepreneurs, and other key stakeholders are keeping a close watch as we head into 2025. All indications point to the industry experiencing a dynamic year in 2025.
We’re keeping our eye on these key factors that will influence the sector’s trajectory this year. ZTERS partners with construction professionals nationwide so we aim to stay in the know on emerging trends so that we can provide better support.
Here’s an overview of the anticipated trends and developments for construction in 2025:
Economic Outlook and Interest Rates
Economists express cautious optimism for the construction sector in 2025, largely due to expected reductions in interest rates. Following a cumulative 100 basis point cut in 2024, an additional reduction is anticipated in 2025. This monetary easing may very well stimulate construction activities across various sectors.
Sector-Specific Projections
Residential Construction
The residential sector is set to experience significant growth, with an estimated 11.5% rise in 2025. This expansion is driven by urbanization and government incentives aimed at boosting housing supply.
Non-Residential Construction
Non-residential starts are expected to grow by 5.9% in 2025, fueled by investments in hotels, retail, and healthcare facilities.
Infrastructure Projects
Federal funding from initiatives like the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) continues to bolster infrastructure projects, particularly in highway and bridge construction. This sector saw an 11.2% increase in 2024, with an anticipated 8.8% rise in 2025.
Labor and Supply Chain Considerations
While supply chain pressures have eased, challenges persist in the labor market. The industry continues to face shortages of skilled workers, impacting project timelines and costs. Addressing these labor constraints — through initiatives like training incentives, education, advocacy, and strategic recruitment — remains a priority for sustained growth.
Technological Advancements
As with every industry, technology is transforming the way the construction industry works. The increasing reliance on digital infrastructure is driving the construction of data centers and technology hubs. As such, the sector must continue to adapt to technological demands and integrate innovative construction methods.
Check out this article for a more in-depth exploration of different construction technologies.
Regional Variations
It’s worthwhile to note that growth may vary by region and sector. With that being said, areas benefiting from megaprojects in manufacturing, data centers, and infrastructure are likely to see more robust expansion, while regions without such investments may experience slower growth.
Wrapping Up: 2025 Construction Insights
The construction industry in 2025 is set to navigate a landscape shaped by economic policy shifts, sector-specific demands, and ongoing labor challenges. As with any projections though, nothing is set in stone. It’s important to remain attentive to these factors in order to capitalize on emerging opportunities and mitigate potential risks.
Check out other ZTERS blog posts related to the construction sector and get in touch to have your construction sites services needs met!