Americas
USA
Tech opportunities remain strong in a politically changing environment
The return of the Republican Donald Trump’s administration to the White House brings potential changes to economic and trade policies, which could influence construction costs and growth. While we anticipate overall construction activity to remain steady or increase slightly in 2025, with cost rises of around 4%, the outlook depends on a range of factors, including labour availability and evolving policy decisions. The tech sector is expected to see much of the growth in construction, fueled by continued demand for semiconductor manufacturing and data centres.
Inflation is currently the lowest it has been in three years, and construction material costs have plateaued over the past two years. This provides a stable foundation for planning. However, several factors may push costs higher in 2025, particularly labour shortages. Skilled trades such as electricians, specialty pipefitters, and ironworkers all require premiums, which must be factored into early-stage project planning.
The incoming administration’s policies have the potential to shape the construction landscape in significant ways. The newly announced tariffs with key trading partners could create upward pressure on costs, while encouragement for domestic manufacturing and a potentially more liberal approach to energy exploration may offer new opportunities. For example, increased focus on domestic energy production could boost demand for related infrastructure, including pipelines and refineries, presenting growth prospects for the sector.
Existing legislation, such as the CHIPS Act, Infrastructure & Jobs Act, and Inflation Reduction Act, has provided tailwinds for the construction industry over the past two years. These laws have supported funding for tech manufacturing projects, including battery, solar panel, and semiconductor facilities. Any significant changes to this legislation could impact these pipelines, but new policies might also introduce alternative funding mechanisms or incentives.
Latin America
Construction growth amid economic and climate factors
The construction sector is expected to experience moderate growth, with a forecasted increase of around 3%. Investment activity is gradually rising, particularly in infrastructure projects. However, factors such as global political and economic uncertainty, as well as the effects of climate change, may limit the pace of growth.
Investment in sustainability initiatives will be prioritised, including renewable energy and urban resilience programmes. This will create significant opportunities for construction. Rising population growth across urban centres in Mexico, Colombia and Peru is leading to increased demand for affordable housing options, providing a boost to the residential construction sector.
We anticipate cost escalations of around 3% throughout the region as shortages of key materials such as steel and copper, supply chain disruption, skilled labour shortages and inflation apply pressure on prices. More specifically, we expect cost increases in Mexico (3-4%) to continue to outpace Colombia (3%) and Peru (2%). In all three countries, cost increases are forecast to remain below the general inflation rate.
