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Business Environment Profiles - United States

Value of construction

Published: 16 June 2025

Key Metrics

Value of construction

Total (2025)

1490 $ billion

Annualized Growth 2020-25

1.2 %

Definition of Value of construction

The value of construction provides estimates of the total dollar value of private construction work done in the United States. The data includes construction work done on building and nonbuilding (e.g. roads, bridges, etc.) new structures or improvements to existing structures. Data estimates include the cost of labor and materials, cost of architectural and engineering work, overhead costs, interest and taxes paid during construction and contractors' profit. Maintenance and repairs to existing structures, land acquisition and the cost and installation of machinery are not included. Data is sourced from the US Census Bureau and presented in chained 2017 dollars.

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Recent Trends – Value of construction

The value of construction, encompassing both nonresidential and residential sectors, is shaped by a confluence of economic and market factors. For nonresidential construction, economic growth, interest rates and government policies are significant drivers. Historically, strong economic performance encourages investment in commercial spaces, though interest rate fluctuations can impact financing costs and developers' decisions. Technological advancements improve construction efficiency, while labor and material costs, alongside regulatory environments, affect project profitability and prices.

Residential construction experienced a post-pandemic surge due to low mortgage rates and work-from-home demands, but faced challenges as rates doubled by 2023. Despite this, 2024 saw modest growth with stabilizing rates, and 2025 anticipates further improvement as rates are expected to decline slightly. Nonresidential construction, after initial pandemic-related declines, rebounded due to low interest rates and substantial government stimulus. Healthcare facilities construction offset early declines, while the office segment suffered from the shift to remote work. The CARES Act and American Rescue Plan Act, totaling over $4 trillion, boosted growth. However, rising interest rates have moderated expansion, with growth dropping from low-double digits to mid-single digits in 2024, reflecting the complex interplay of economic factors shaping the construction landscape.

The construction sector's trajectory reflects broader economic patterns, interest rate trends and governmental influences. While nonresidential construction is expected to experience slower growth due to overbuilt segments like warehouses, demand for data centers and a potential return to in-office work settings might bolster commercial construction. Residential construction, while facing challenges due to elevated mortgage rates and potential labor cost increases from immigration policies, is poised for modest growth in 2025. The supply of new homes, although gradually improving, remains constrained, putting pressure on prices. Both sectors illustrate the complex interplay of market demands, policy decisions, and economic conditions driving the value of construction.

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5-Year Outlook – Value of construction

The construction industry's outlook is moderately optimistic, driven by anticipated interest rate...

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