Introduction

The construction industry was strong in 2024, but the outlook for 2025 suggests slower, steadier growth. The Architectural Billings Index, amongst other indicators, has shown contractions in nine months out of twelve, and project starts have been at record lows. These trends are expected to be reflected in spending data over the next months. However, economic factors such as anticipated interest rate cuts and increased loan originations should result in new projects in late 2025. Federal policy changes could cause unpredictability, affecting areas such as infrastructure investment, trade policies, and regulatory frameworks.

Market Trends

Construction material costs are expected to rise again in 2025. Factors such as natural disasters, inflation, and ongoing geopolitical unrest will contribute to price increases for essential building materials like steel, lumber, and cement.

Supply chain disruptions will remain a significant concern. Despite the effects of the pandemic becoming less relevant, shortages in key supplies such as roofing materials and microchips for construction equipment are expected to continue. These deficits could lead to project delays and cost overruns, especially for large-scale infrastructure projects and government-funded developments like many mega manufacturing facilities. 

Sustainability

Stricter building codes and global environmental concerns are creating demand for energy-efficient, net-zero buildings. The use of renewable energy systems, such as solar panels and advanced HVAC technologies, leads to higher initial construction costs, economies of scale and technological advancements will help lower these costs over time. Sustainable building materials like low-carbon concrete and recycled steel are continuing to rise in popularity.  As more projects seek LEED certification and other sustainability credentials, the market for green construction is projected to grow by 15% annually.

Labour Shortages

The available workforce is aging and the influx of new killed labourers is insufficient to meet the demand to replace them. According to the National Association of Home Builders (NAHB), over 70% of construction firms reported difficulty hiring skilled workers in 2022, with specialities such as electrical work, plumbing, and heavy machinery operation being particularly affected. This shortage is driving up labour costs, further increasing overall construction expenses.

Technological Advancements

Building Information Modeling (BIM) has revolutionised project planning and execution by enhancing collaboration and reducing costly errors. When combined with augmented and virtual reality software, BIM can provide improved visualization and efficiency in project execution.

Artificial intelligence (AI) and automation will also play a large role in construction cost management. AI-powered predictive analytics optimise project planning and resource allocation, reducing delays and minimising waste. Automation via robotics, 3D printing, and drones is reducing reliance on manual labour and improving safety and construction schedules. Although these technologies require a significant upfront investment, they can help reduce labour costs and project completion times.

To discuss mega facility construction and the key issues facing the industry, connect with solution providers and network with delegates, attend the Constructing Mega Facilities: Advances in Planning, Design, and Engineering Summit taking place on April 9th and 10th, 2025, in Houston, Texas.

For more information, visit our website or email us at info@innovatrix.eu for the event agenda. Visit our LinkedIn to stay up to date on our latest speaker announcements and event news

Sources:

JLL

Neuroject