Glass and Glazing Contractors NAICS 238150

May 7, 2025 - Construction Growth to Slow in 2025

• North American construction and engineering spending in 2025 is expected to grow by 3% after increasing an estimated 7% in 2024, according to FMI’s second-quarter 2025 North American Engineering and Construction Outlook. Nonresidential building construction spending is forecast to be flat in 2025 as growth in amusement and recreation (+7%), transportation (+3%), public safety (+3%), and educational (+3%) is offset by weakness in commercial (-7%), lodging (-5%), and manufacturing (-1%). Amid high mortgage interest rates and a lack of affordability, single-family construction spending is forecast to rise by 3% in 2025. A recent jump in new apartment supply and unfavorable cost conditions will reduce multifamily spending by 12% in 2025.
• Demand for building design services declined in March compared to February, according to an April report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 41.1 in March compared to February’s reading of 45.5. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 47.7 in March compared to 47.8 in February, but the index for the value of new design contracts increased from 42 to 42.4. The AIA’s Chief Economist, Kermit Baker said, “Clients are increasingly cautious about starting projects due to uncertainty over future trends in interest rates and building materials costs, as well as the potential for an economic slowdown. Unfortunately, this softness in firm billings is likely to continue as indicators of future work remain weak, however, the average project backlog at firms stands at a reasonably healthy 6.5 months, offering a bit of a buffer if future project work continues to remain soft.”

• The total value of construction put in place decreased 0.5% in March compared to February, according to the US Census Bureau. Spending on nonresidential projects fell 0.5%. Eleven of 18 nonresidential construction subcategories saw spending decline, including healthcare (down 1.8%), lodging (-1.3%), office (-1.2%), commercial (-1%), and educational (-0.8%). Pockets of spending growth for nonresidential building projects included transportation (up 1.2%), public safety (+0.7%), and amusement and recreation (+0.1%). Associated Builders and Contractors Chief Economist Anirban Basu said, “Data center investments, which accounted for more than 70% of the increase in private nonresidential construction spending between March 2024 and March 2025, are perhaps the only remaining source of industry momentum. Manufacturing construction, while still elevated, has wavered in recent months. Most commercial segments remain subdued under the weight of high borrowing costs and tight lending standards.”
• Home builder confidence in the single-family market remained in negative territory in April 2025 amid mounting concerns about tariff threats, higher input costs, and economic uncertainty, according to the National Association of Home Builders (NAHB). As measured by the NAHB/Wells Fargo Housing Market Index (HMI), home builder sentiment rose one point to 40 in March from 39 the previous month. Any HMI reading over 50 indicates that more builders see conditions as good than poor. Builders face headwinds, including high materials costs being made worse by trade strife and labor and lot shortages. Trade policy uncertainty makes it difficult for builders to price homes accurately and engage in basic business planning.