JLL Reports US Construction Industry Builds Momentum for 2025

The U.S. construction industry is poised for a year of measured growth and adaptation in 2025, following a year of exceptional performance marked by waning starts. JLL’s new 2025 U.S. Construction Outlook details the opportunities, challenges and key focus areas for the construction industry in the coming year, accounting for a rapidly shifting political and economic landscape in the near term.

Baseline forecasts call for modest real growth by year-end 2025. While political and economic transitions may temper some opportunities, JLL expects a return to fundamentals to drive growth in key sectors. The shifting dynamics will take time to solidify, but the essential need for transformative growth in the built environment remains clear.

“The construction industry has bridged the gap in starts remarkably well to this point but needs the next round of ground breakings to land smoothly and keep momentum up for the ongoing energy, tech, manufacturing and economic transformation we’re in,” said Andrew Volz, research manager, Project and Development Services, JLL. “We’re emerging from the period of ‘peak waiting’ for development with anticipated rate cuts, returning loan demand and elevated architecture and engineering inquiries signaling an uplift.”

Getting ahead of the curve is crucial
The construction industry faces a dynamic landscape in 2025, with shifting economic conditions and evolving project requirements. Anticipating these changes while finding the right opportunities for growth is a key challenge for the sector.

“To capitalize on the cycles of growth and capacity in the construction industry, investors and occupiers need to anticipate market shifts and be prepared for potential project delays,” said Louis Molinini, Americas market lead, Project and Development Services, JLL. “We are closely monitoring economic indicators, staying informed on policy changes and developing flexible strategies to help our clients navigate uncertainty.”

The ability to foresee and respond to market trends will play an increasingly important role in project success. Companies must balance short-term challenges with long-term opportunities, adapting their approaches to evolving economic, environmental and demographic factors.

Embracing sustainability, innovation is a necessary complexity
“While we see investment across all industries – data center, healthcare and industrial projects are really embracing both sustainability and technology as part of their growth,” said Julie Hyson, Americas portfolio clients, services and industries lead, Project and Development Services, JLL. “However, overlapping demand from hot sectors, competition from other projects and widespread shocks continue to distort supply selectively. Having the right team in place to manage these nuanced pressures is critical.”

The push for green building practices from local governments and client directives, energy efficiency and reduced carbon footprints will continue to shape project requirements. Simultaneously, improved integration of advanced technologies such as artificial intelligence, IoT and digital twins are reshaping design, construction and building management, offering opportunities for increased efficiency and value.

In a welcome reprieve, construction cost growth was nearly flat year-over-year in 2024. However, JLL’s report finds cost growth will be between 5% and 7% in 2025. Increases will vary by materials, reflecting demand shocks from natural disasters, booming sectors and vulnerability to changing economic policy.

The U.S. construction industry is primed for growth, but the expansion comes with complexities. The strategic positioning of real estate required to navigate environmental, social, demographic and financial changes is dynamic. Balancing short-term operational efficiency with long-term goals, while also adapting to rapidly changing organizational needs and technological advancements is crucial.