KEY POINTS
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ConstructConnect’s Quarterly U.S. Put-in-Place Construction Forecast Report for Winter 2025 highlights a 3.3% contraction in construction spending this year, revising the total to $2.12 trillion, reflecting near-term challenges in the industry.
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Despite the current downturn, the report projects robust growth of over 7% in 2026 and 2027, followed by steady 5% annual growth through 2029, resulting in a 5-year CAGR of 4.1%.
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Improving housing affordability, driven by rising incomes and declining mortgage rates, is expected to fuel a 9.7% increase in residential construction activity in 2026, with an additional 8.7% growth anticipated in 2027
ConstructConnect released its Quarterly U.S. Put-in-Place Construction Forecast Report for Winter 2025. Highlights from the report include a projected 3.3% contraction in the construction industry for 2025, with total spending revised to $2.12 trillion.
Despite these near-term headwinds, the outlook remains optimistic, with growth expected to exceed 7% in both 2026 and 2027 and then continue at a solid 5% annually through 2029. Our strong long-run outlook has elevated our 5-year compounded annual growth rate (CAGR) outlook to 4.1%.
Outlook: Nonresidential and Institutional
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Nonresidential Building (NRB) is also expected to shift into positive territory by 2026.
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Notably, Office and Data Center spending is set to grow by 8.3%, and Retail and Warehouse activity by 8.1%, pushing total commercial spending to $270.1 billion for a 7.8% gain.
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Institutional construction will likely see steady growth as well, with spending expected to reach $274.9 billion (up 3.2%) in 2026.
Civil and Sector Outlook
Civil construction is projected to rebound from 2026 onward, boosted by sustained investment in Data Centers and an 8% annual growth in Power and Communications between 2026 and 2029.
However, Sewage/Waste Disposal & Water Supply is forecasted to experience notable declines, resulting in a negative 5-year CAGR of 1.5%.
Private vs. Public Sector Growth
The private sector remains the engine of expansion, with a robust projected 5-year CAGR of 5.8%, while the public sector is now expected to grow by 1.3% over the same period—a marked improvement, though still reliant on late-decade gains.
Residential Construction Outlook
Residential construction is set to benefit from improving affordability as incomes rise and 30-year mortgage rates have declined by almost 1% since early 2025. As a result, we anticipate residential activity to advance by 9.7% in 2026 and 8.7% in 2027, supporting momentum across the broader market.
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At ConstructConnect, our software solutions provide the information that construction professionals need to start every project on a solid foundation. For more than 100 years, our keen insights and market intelligence have empowered commercial firms, building product manufacturers, trade contractors, and architects to make data-driven decisions, streamline preconstruction workflows, and maximize their productivity. Our newest offerings—including our comprehensive, AI-assisted software—help our clients find, bid on, and win more projects.
ConstructConnect operates as a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the Nasdaq 100, S&P 500, and Fortune 1000.
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