US Construction Market to Slow Down in 2025 Amid Global Economic Uncertainty

Strategic Insights -

The US construction industry, which was expected to grow by 6.6% in real terms in 2024, is projected to slow down to 1.4% in 2025 due to decreasing investor confidence and the pause on stimulus schemes. The Inflation Reduction Act and the Infrastructure Investment and Jobs Act, both key drivers of the energy and utilities and infrastructure construction sectors, have been temporarily paused by President Trump's Executive Order. This decision, alongside weak demand in the commercial, industrial, and residential construction sectors, is expected to cause a slowdown in the industry. However, the analyst forecasts the construction industry to expand by an annual average rate of 2% during 2026 to 2029, thanks to investments in transport infrastructure, housing, and oil and gas projects.

Key Takeaways:

  • The US construction industry is expected to slow down to 1.4% in 2025 due to decreasing investor confidence and the pause on stimulus schemes.
  • The Inflation Reduction Act and the Infrastructure Investment and Jobs Act have been temporarily paused by President Trump's Executive Order, causing a slowdown in energy and utilities and infrastructure construction.
  • The analyst forecasts the construction industry to expand by an annual average rate of 2% during 2026 to 2029, thanks to investments in transport infrastructure, housing, and oil and gas projects.
  • President Trump's "America First Investment Policy" has been launched to develop the nation's security and infrastructure, while encouraging an inflow of greenfield investments, including those aimed at boosting exploration of oil and natural gas resources.
  • Significant investments have been made by leading companies, including NVIDIA and Johnson & Johnson, totaling over $2.8 trillion, with a goal of attracting $100 billion from Taiwanese semiconductor manufacturer Taiwan Semiconductor.
  • A significant infrastructure project in Louisiana is underway, including the construction of a liquified natural gas (LNG) export terminal and associated pipeline, with a value of $10 billion and a targeted completion date of 2031.

Statistics:

  • The US construction industry is expected to grow by 6.6% in real terms in 2024 and slow down to 1.4% in 2025.
  • The Inflation Reduction Act and the Infrastructure Investment and Jobs Act have been temporarily paused by President Trump's Executive Order for 90 days, starting January 20, 2025.
  • The "America First Investment Policy" aims to attract $2.8 trillion in investments, including $100 billion from Taiwan Semiconductor.
  • Significant investments have been made by leading companies, including $100 billion by NVIDIA and $55 billion by Johnson & Johnson.
  • The construction of a liquified natural gas (LNG) export terminal and associated pipeline in Louisiana is expected to cost $10 billion and be completed by 2031.

Sources:

  • "The US Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis to 2029 (Q1 2025)" report by Research and Markets
  • Executive Order "Unleashing American Energy" by President Trump, January 20, 2025
  • "America First Investment Policy" speech by President Trump, mid-February 2025
  • Press releases by NVIDIA and Johnson & Johnson, mid-March 2025
  • Louisiana Department of Natural Resources press release, March 2025