The U.S. nonresidential construction market is softening amid trade uncertainty, inflationary input costs, and shifting federal priorities. While overall starts have slowed, data centers, select industrial segments, and military readiness remain resilient; supported by investment in AI, reshoring, and national security. Public-sector activity is under pressure, with a 16.8% decline in starts forecast for 2025. Similarly, the FMI Index dipped from 52.2 in Q2 to 50.8 in Q3, reflecting rising concern over materials costs, tariffs, and margin compression. Interest rate relief is expected to be limited, with long-term yields continuing to constrain financing and dampen new project starts heading into Q3.
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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 a 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.
