US and Major States Construction Industry Forecast 2025: Projected 1.9% Annual Growth Rate from 2026 to 2029 Driven by Investments in Transportation, Data Centers, Housing, and Manufacturing

US Construction Industry Outlook (2026-2029)

• Key Investment Areas: The US construction industry is poised for growth in sectors such as transportation infrastructure, data centers, housing, and manufacturing projects, driven by significant investments and federal funding.
• Federal Funding Impact: The Federal Highway Administration has allocated $4.9 billion for bridge improvements, which is expected to enhance infrastructure development and benefit around 42,000 bridges.

Current Market Trends

• Growth Rate Decline: The construction industry is projected to experience a sharp slowdown in growth, with only a 1% increase in 2025 compared to 6.5% in 2024, attributed to low homebuilder sentiment and rising construction costs.
• Material Price Increases: Retaliatory tariffs on imports have led to price hikes in essential building materials like steel, lumber, and aluminum, negatively impacting project viability and investment strategies.

Residential Construction Challenges

• Housing Demand Issues: The residential sector is facing challenges, with new housing permits down by 3.5% year-on-year in early 2025 and a 1.6% decrease in new housing construction starts.
• Price Index Trends: The price index for new single-family homes under construction rose by 4.2% year-on-year from January to April 2025, following a 2.2% increase in 2024.

Future Growth Projections

• Average Annual Growth: From 2026 to 2029, the construction industry is expected to grow at an average annual rate of 1.9%, supported by ongoing investments in key sectors.
• Bridge Investment Program: The FHWA's Bridge Investment Program, which includes an additional $500 million for rural bridge repairs, is a significant initiative aimed at improving infrastructure.

Report Insights

• Comprehensive Analysis: The report provides historical and forecast valuations of the US construction industry, segmented by various sectors, and includes insights into mega-project pipelines and major contractors.
• Market Evaluation Tools: It offers tools for identifying market opportunities, assessing growth potential, and understanding industry trends, which can aid in formulating business strategies and evaluating risks.