Foreword
Markets stay steady as caution grows
This quarter’s construction sector shows a clear split. While a few sectors continue to perform strongly, activity across most of the US market has slowed. Employment is still rising, but growth is limited. That growth is led by power, digital infrastructure, and advanced manufacturing. Investment remains strong in data centers, semiconductor plants, and life sciences projects. These sectors attract most new capital investment and continue to drive demand, while increasing competition for skilled labor.
Elsewhere, conditions are weaker. Nonresidential construction remains uneven. Commercial and institutional projects continue to move slowly. Traditional manufacturing also lags. Approval times are longer, and fewer new projects are starting. Owners, contractors, and suppliers continue to act cautiously in these sectors.
Costs are a central issue. Oil price volatility continues to influence construction costs. Higher oil prices are increasing transport, logistics, and petrochemical-based materials costs. This is adding uncertainty to project budgets. Labor adds further pressure. More construction jobs are being created, but skilled workers remain hard to find. Wages also continue to rise.
The wider economy remains uncertain. Inflation is still above long-term targets. This is increasing costs and adding risk to construction projects. Geopolitical uncertainty remains elevated. Continuous changes in the Middle East add to the uncertainty in energy-related construction costs. Many firms are prioritizing strategic projects, delaying procurement decisions, and increasing contingency allowances.
In this environment, success will depend on the ability to understand the risks and adjust project scope, timing, and procurement strategies as conditions change.