Commercial Building Contractors NAICS 2362

Nov 4, 2025 - Building Design Services Demand Remains Weak

• Demand for building design services fell in September from the prior month, according to an October report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) dropped to 43.3 compared to August’s reading of 47.2. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries dropped to 50.1 in September from 50.3 in August, and the index for the value of new design contracts decreased from 47.2 to 46.3. September marked the 19th consecutive month of decline for new design contracts. The AIA’s Chief Economist, Kermit Baker said, "Unfortunately, business conditions remain relatively weak at architecture firms. There was some erosion in project backlogs this past quarter, with the greatest slippage coming from firms with an institutional specialization."
• North American construction and engineering spending in 2025 is expected to decline 1% after increasing an estimated 6% in 2024, according to FMI’s fourth-quarter 2025 North American Engineering and Construction Outlook. Commercial construction spending is forecast to decline by 9% in 2025 as retail store closures surpass openings for the first time in a decade and warehouse vacancies remain high. Lodging construction is expected to decline by 2% in 2025, amid sluggish business travel growth and as financing conditions and maturing debt pose headwinds. High vacancy rates will also keep office construction spending growth to 1% in 2025. Federal funding cuts are projected to result in a 1% decline in educational construction in 2025, while healthcare projects are expected to see a 1% increase in spending.

• During a webinar in October, Associated Builders and Contractors (ABC) chief economist Anirban Basu warned of tightening conditions for the U.S. construction industry, with rising interest rates, material costs, and financing challenges threatening project viability, according to Construction Dive. While data center construction remains strong, driven by investments in AI infrastructure, other sectors, such as commercial, manufacturing, and public infrastructure, are cooling due to tariffs, saturated markets, and dwindling government funding. Contractors outside the data center space report shrinking backlogs and reduced deal flow. The expiration of federal infrastructure funding in 2026 may further dampen demand.
• In September, OpenAI announced $1 trillion in investments for building out data centers to power increasing global demand for its ChatGPT generative AI chatbot, according to The Wall Street Journal. OpenAI estimates it will need 20 gigawatts of computing power as the number of weekly global ChatGPT users has climbed to more than 700 million. At a cost of $50 billion per gigawatt, OpenAI, and its partners Oracle and Japan-based Softbank, will need to spend at least $1 trillion for computing infrastructure. In addition to a Central Park-sized computing warehouse complex under construction near Abilene, Texas, OpenAI is building a similar site in New Mexico with Oracle. Other, smaller complexes will be in Austin, Texas, and Lordstown, Ohio. Another site in an as-yet-unnamed location in the Midwest is also in the works.