KEY POINTS
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The US Expansion Index for August 2025 rose to 1.05, a 5% year-over-year increase after three months of contraction.
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This level reflects construction market resilience and signals potential growth through year-end amid possible interest rate relief.
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The industrial, Military, and Commercial sectors drove the increase, with planned Industrial investment up 89%, Military up 24%, and Commercial up 15%, which suggests improving business confidence.
Expansion Index Rebounds in August
This level comes after three consecutive months of contraction for the US, despite the Index’s strong start to the year. The Expansion Index measures the monthly total-dollar value of potential future construction projects in preconstruction, compared to the same month last year.
The August rebound indicates that the construction market is showing resilience to recent trade and labor shocks. The rebound also signals potential for continued growth through year-end, especially with possible interest rate relief.
Industrial, Military, and Commercial Sectors Drive Expansion Index Growth
The rise in the US Expansion Index was driven by growth in planned Industrial, Military, and Commercial sector investment. Planned Industrial construction investment increased 89% compared to August 2024, potentially showing an industrial reshoring effort as manufacturers have faced trade barriers throughout the year.
The planned 24% Military sector expansion reflects increased federal defense spending, while a 15% Commercial expansion could signal rising business confidence.
Southern and Western States Lead in Planned Construction Investment
Five states led the Expansion Index for August, with Arizona, New Mexico, Oregon, Georgia, and Alabama all reaching an Index reading above 1.195, indicating strong expansionary growth.
Regional patterns emerged as the southern states of Georgia and Alabama experienced planned investment growth mainly in the Commercial sector. Meanwhile, the top Western states saw strong gains in planned Industrial investment.
The ConstructConnect Expansion Index, shown in this chart, for August 2025 was 1.05, representing a 5% increase in planned US construction dollars compared to August 2024. Image: ConstructConnect
What is the Expansion Index?
The ConstructConnect Expansion Index compares the total dollar value of construction projects in planning for the current month to the value of projects in planning for that same calendar month in the prior year.
The Expansion Index measures the dollar volume of pre-bid projects in ConstructConnect’s extensive database for states and metropolitan statistical areas (MSAs) across the United States and Provinces/Territories and census metropolitan areas (CMAs) in Canada. This reflects all stages of preparation prior to construction field-work at the beginning of any given month this year, versus what was calculated at the same time last year. The types of structures included in these calculations are multi-family residential, nonresidential building, and civil/heavy engineering.
An index value less than 1.0 indicates a market potential that is flat or declining, while an index value above 1.0 speaks of market potential that is increasing. An Index value of 2.0 or more indicates the market potential is significantly greater than a year ago.
