Drywall and Insulation Contractors NAICS 238310

Dec 9, 2025 - Nonresidential Building Construction Starts Improve

• Nonresidential building construction starts increased 17.9% in October compared to the previous month, according to Dodge Construction Network. Commercial starts rose 19.5%, led by data centers (+45.5%) and retail stores (+15.1%). Office construction starts also improved, but starts were lower for hotels (-19.3%), warehouses (-1.7%), and parking garages (-46.1%). Institutional starts grew 3.7% due to project categories other than education and healthcare, which saw starts fall 20.8% and 2.7%, respectively. Manufacturing starts jumped 107.2% in October compared to September, but the sector remains volatile from month to month. Nonresidential building starts were up 5.6% for the first 10 months of 2025 compared to the same period in 2024. On a year-to-date basis, commercial and industrial starts increased 13.6%, while institutional starts fell 2.2%.
• America’s largest homebuilders are struggling to sell new homes despite offering 4% mortgages and deep discounts, according to The Wall Street Journal. D.R. Horton and Lennar have slashed prices and added incentives, but demand remains weak, pushing unsold inventory to levels last seen in 2009. Builders are slowing construction, with D.R. Horton cutting starts by 21% year over year for the three-month period through September. Regional gluts in Texas, Florida, Southern California, and Washington, DC reflect rising resale competition, fewer foreign buyers, and economic uncertainty. Investor activity is at a 15-year low, with institutional buyers demanding steep discounts that builders won’t meet. New homes, often located in less desirable areas and targeted at first-time buyers, are more challenging to sell.

• Home builder confidence in the single-family market increased slightly in November, but remained in contraction territory amid sustained industry headwinds, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose one point to 38 in November 2025. Any HMI reading over 50 indicates that more builders see conditions as good than poor. Builders reported that the US government shutdown added to existing challenges, including tariff-related economic uncertainty and rising construction costs. The HMI survey also showed that 41% of builders reduced home prices in November, marking a record post-pandemic high. The average price reduction of 6% was unchanged from the previous month.
• Home remodeling spending is expected to remain stable for the rest of this year and through mid-2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in October by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 1.9% to $511 billion in the fourth quarter of 2025, compared to Q4 2024. In the first quarter of 2026, remodeling spending is expected to reach $524 billion, representing a 2.4% increase from the first quarter of 2025. Spending will then moderate to $519 billion in Q2 2026, up 2.1% from Q2 2025. In the third quarter of 2026, year-over-year spending is forecast to rise 1.9% to $517 billion. While solid remodeling permitting activity and gradually improving single-family home sales will support remodeling activity, potential headwinds include continued weakness of housing starts and economic uncertainty.