By Kathy Wells – for ConstructionPros.com – February 21, 2025
Experts and economists dig into today’s top trends and what contractors can expect on the road ahead
As the construction industry welcomes a new year and a new presidential administration, many contractors wonder what the future may hold. In conversation with industry experts, it appears that many of the existing industry challenges, such as the skilled labor shortage and market conditions, may remain. It’s a mix of optimism and uncertainty that lead the latest industry outlooks, however, experts suggest that careful planning and strategic decision-making can lead contractors to success in 2025.
According to Gregg Schoppman, partner at consulting and investment banking firm FMI Corporation, “In what appears to be a continuation of the previous year’s performance, the construction industry continued to see either growth or stability in all of its sectors,” said Schoppman. “Anchored by a large thrust in the residential sector once again, businesses largely flourished. Most organizations have seen stability in both profitability and the competitive landscape, according to FMI’s Civil Infrastructure Index.” However, Schoppman also notes a sizeable juxtaposition to the industry’s performance, and the lingering signs of troubled waters for all businesses.
Critical Industry Challenges for Contractors
In addressing the most critical construction industry challenges facing contractors, Zack Fritz, economist at Associated Builders and Contractors (ABC), said, “The construction industry will face several headwinds in 2025, including still-elevated materials costs, labor shortages focused in certain occupational categories, the lag effects of high interest rates and a weak residential sector.