Total US construction starts are expected to grow by 1.1% in 2025, with Nonresidential building rising by 7.5% and Residential construction declining by 8.8%.
Manufacturing, which is projected to grow by 67.3%, and Commercial megaprojects, such as Data Centers and Transportation Terminals, are driving Nonresidential growth, while Civil Construction sees moderate gains in Airports, Roads, and Bridges.
Institutional construction is expected to decline by 8.8%, and cyclical Commercial subsectors such as Hotels and Amusement Facilities remain weak.
In the ConstructConnect Winter 2025 Construction Starts Forecast, released today, we have slightly upgraded our 2025 outlook for total US construction starts to a 1.1% increase, as the macro environment continues to fluctuate.
The forecast is driven largely by a stabilizing investment outlook, which is weaker than what we expected at the beginning of the year, but has improved with recent developments, specifically the recently announced China-US trade deals.
Total US construction starts are expected to grow by 1.1% in 2025, with Nonresidential building rising by 7.5% and Residential construction declining by 8.8%. Image: ConstructConnect Construction Starts Forecast Winter 2025
Nonresidential building is expected to expand by 7.5% in 2025, driven by the ongoing strength in Manufacturing (forecast up 67.3%) and Commercial megaprojects.
Manufacturing’s rapid ascent is propelled by Data Center components, semiconductors, EV supply chain investments, and reshoring initiatives.
Private Offices, which include data center construction, will continue to expand as large tech companies chase AI infrastructure. Meanwhile, Transportation Terminals will benefit from federal infrastructure bills and logistics value-chain realignment.
However, this exceptional growth is not expected to be sustained. New Manufacturing construction is likely to contract sharply (by 20%) in 2026 as the pipeline matures, and the pace of new megaproject starts is anticipated to slow.
Institutional construction is forecast to decline by 8.8%, with sharp pullbacks in Prisons (down 35.9%), Hospitals & Clinics (down 24.6%), and Medical Miscellaneous (falling 18.3%).
Counterbalancing sectors include Nursing Homes (up 20.2%), Police and Fire (up 10.7%), and Religious Buildings (adding 7.7%), reflecting changing demographics and evolving public-service priorities.
Commercial sector growth is expected to moderate to 4.5%, down from the high marks of 2024.
The best outlook is for Transportation Terminals (up 85.9%), Private Offices (up 35.9%, driven by new Data Centers), and Sports Stadiums (adding 5.5%).
Cyclical subsectors such as Hotels & Motels (down 21.2%), Amusement Facilities (pulling back 20.7%), and Parking Garages (dipping 20.0%) will remain soft as travel, leisure, and in-person office demand recover slowly.
Civil Construction is projected to grow moderately in 2025, with Airports (up 14.2%), Roads (adding 7.7%), and Bridges (up 7.6%) expected to be boosted by infrastructure grant programs.
Only the Miscellaneous Civil subsector is projected to decline substantially, falling 11.6%.
Sustained investment in transport networks, resilient water infrastructure, and bridge replacement will underpin sectoral stability despite continued constraints in other Civil areas.
The forecast for Residential construction is subdued, with a third consecutive year of decline estimated to retreat 8.8% for 2025.
Single-family starts are projected to contract by 6.5%, while Multi-family starts are projected to decline by 13.1%. Ongoing tariff uncertainty, high borrowing costs, and broader credit constraints are likely to cloud recovery prospects.
Localized disaster rebuilding will contribute only modestly; most regions will experience weak permitting, and continued builder caution as apartment oversupply works its way through the market.
Read the latest quarterly Construction Starts Forecast Report to get a five-year forecast of construction starts by type of structure and by state, as well as drivers influencing each building sector.
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