ConstructConnect forecast data shows Midwest nonresidential construction starts will peak at $145.5 billion in 2025, before moderating to $126.9 billion in 2026 and stabilizing near $131.5 billion in 2027, signaling normalization rather than decline.
Civil construction, driven by major infrastructure investments, will dominate with $65.3 billion in 2025 and remain a stabilizing core through 2027, while education stays steady and industrial activity shifts toward modernization.
Commercial and government construction will contract after 2025, but contractors can secure opportunities in civil, education, and healthcare by adapting strategies, targeting resilient sectors, and leveraging data to anticipate evolving market needs.
The Midwest US nonresidential construction market is set to reach a historic apex in 2025, with total starts projected at $145.5 billion. Actual data through July confirms the market’s momentum, while the forecast for the remainder of the year supports expectations of a record annual total across the region.
Despite this extraordinary showing, 2025 also marks a transition point. The forecast anticipates a period of realignment. Regional construction activity is projected to moderate to $126.9 billion in 2026 and then stabilize near $131.5 billion in 2027. This trend reflects normalization rather than a fundamental downturn, with the realignment characterized by construction sector rotation rather than a loss of market strength.
For construction professionals, the Midwest market offers both immediate volume and an evolving landscape. The focus is on identifying the underlying sector trends and forward-looking opportunities as the Midwest shifts from a peak to a new baseline.
In 2025, civil construction takes center stage in the Midwest region, fueled by strong federal and state infrastructure investment. Starts are forecast to reach $65.3 billion for the year, comprising nearly 45% of all nonresidential activity in the region. Key projects driving this expansion include highway upgrades, bridge replacements, water system improvements, and major energy grid work.
As activity normalizes beyond 2025, civil construction is expected to provide a stabilizing core. Although total starts in this sector are projected to taper slightly to $63.9 billion by 2027, the volume of work will remain well above historical norms, offering a reliable foundation for contractors specializing in public infrastructure.
Educational construction is also projected to remain steady through 2025, with starts estimated at $16.5 billion for the year. The sector’s performance is underpinned by ongoing institutional upgrades and efforts to modernize learning environments. Looking toward 2027, educational activity is anticipated to remain consistent, helping to offset adjustments in more volatile market categories.
The industrial construction sector, having expanded rapidly in previous years, is forecast to contract in 2025. Starts are expected to reach $18.4 billion by year-end, reflecting a shift away from the rapid capacity buildout seen earlier in the decade. By 2027, activity is projected to settle at $17.0 billion. The adjustment signals a pivot toward efficiency improvements and selective modernization projects over new facility expansion.
Commercial starts are forecast to spike in 2025, reaching $15.6 billion. The growth is driven by several major developments and corporate projects breaking ground. However, this surge will be short-lived. The sector is projected to moderate significantly, with starts slipping to $7.6 billion by 2027.
Government construction is set for a marked reduction over the outlook period. Starts are forecast at $7.5 billion in 2025, before declining 40% to $4.4 billion in 2027. This change reflects a return to more typical levels of Government construction starts spending in the region.
The Midwest construction market in 2025 offers a moment of historic opportunity matched with the responsibility to navigate an imminent transition. The current year stands out for its record-breaking activity and strong fundamentals, particularly in the civil, education, and healthcare sectors.
The path forward after 2025 involves realignment and greater selectivity. Contractors and suppliers should focus on public infrastructure, healthcare, and education as the most stable segments of the market while approaching industrial and commercial projects with a strategic, efficiency-driven mindset. Understanding the evolving funding streams and project pipelines will be critical in targeting new opportunities.
The Midwest will continue to offer a resilient and active marketplace through 2027 for organizations that adapt quickly and build expertise in core, high-demand sectors. The competitive edge will belong to those who leverage robust data, anticipate owner needs, and position themselves at the forefront of regional infrastructure and essential service delivery.
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