JLL: U.S. Construction Industry Poised for Measured Growth in 2025

(Image courtesy of JLL; Breakout image courtesy of Jan van der Wolf/pexels.com)

JLL, Chicago, released its 2025 U.S. Construction outlook, reporting that the baseline forecasts indicate modest growth in 2025.

That follows a year of exceptional performance but waning starts, JLL noted.

“The construction industry has bridged the gap in starts remarkably well to this point but needs the next round of groundbreakings to land smoothly and keep momentum up for the ongoing energy, tech, manufacturing and economic transformation we’re in,” said Andrew Volz, Research Manager, Project and Development Services, JLL. “We’re emerging from the period of ‘peak waiting’ for development with anticipated rate cuts, returning loan demand and elevated architecture and engineering inquiries signaling an uplift.”

The report listed three key themes that professionals in the construction industry should consider in order to stay competitive in 2025.

For one, it emphasized the importance of staying abreast of evolving economic and regulatory conditions. As an example, the current baseline scenario puts total 2025 construction spending growth between 2-3% above current levels. But, public spending may be redirected or changed due to policy priorities.

It also noted the importance of embracing sustainability and innovation. Construction costs may vary based on those goals. For example, data centers, health care facilities and advanced manufacturing have emphasized sustainability, but related materials may rise in price for a variety of reasons.

In terms of wages, growth was largely absorbed by contractor margins in 2024, with fairly flat bid prices. The baseline forecast for next year expects bid price growth as stats climb and backlogs expand

Finally, it recommended that the industry focus on the existing and future resilience of their assets and the surrounding regions.