REPORT

Today's Construction Economy Report - Q2 2025

By Brandon Michalski

Principal, Construction Economist

U.S. construction is beginning to feel the delayed impact of rising rates, tightening capital, and trade uncertainty, with growth expected to slow and costs to rise in 2025. MSI Economics forecasts elevated risk-driven inflation led by workforce constraints and material availability. For the rest of 2025, contractors are expected to rely more on backlog and to seek escalation clauses to offset rising material prices. While strength persists in data centers and publicly backed sectors, uncertainty in federal funding could slow delivery in the latter. The direction of interest rates and material pricing will shape the second-half outlook. The price paid for new nonresidential construction is expected to increase by 2.9% year over year (YoY) 2025, vs. just 0.1% revised in 2024.

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Meet the author

Brandon Michalski

Principal, Construction Economist

Brandon Michalski is the lead economist for MOCA Systems, Inc., a leading owner’s representative firm providing program and project management services. Brandon's decade in the mining and heavy construction industries provides a foundation for subject matter expertise. He holds a Master of Science in Applied Economics from Johns Hopkins University in Baltimore, MD as well as Bachelor's Degrees in both Mining Engineering and Biology from West Virginia University in Morgantown, WV. Brandon currently lives in Chicago, Illinois with his family and enjoys hiking and camping.