Due to the ongoing government shutdown, economic data for the construction industry is slim to none. Here is what can be extrapolated.
What We Learned in October: Struggling Construction Industry Now Flying Blind
Recent industry data indicate that the construction industry is struggling, with both employment and spending shrinking over the past several months. Unfortunately, “recent” is a relative term; the government shutdown has halted many data releases that would have occurred in October, and many of the freshest statistics now pertain to July or August.
Uncertainty Clouds Outlook
Economic uncertainty has reigned over 2025. The volatility of trade policy and the uncertain effects of tariffs on input prices have made it difficult to anticipate project costs, while immigration policy has reignited labor shortages even as industrywide demand for labor softens. The government shutdown, now nearing a full month in length, only exacerbates that uncertainty.
Construction Backlog Stable, Contractors Remain Confident
Despite uncertainty and concerning economic data, ABC’s Construction Backlog Indicator was unchanged at 8.5 months in September. While contractor confidence has declined slightly over the past few months, expectations for sales, profit margin, and hiring all remain positive and above year-ago levels.
Materials Prices Begin to Rise
While the effects of tariffs on imported materials prices are obvious, higher import taxes also put upward pressure on domestically produced inputs. This is apparent in the most recent producer price index data, which indicates sharp increases in domestic prices for many key inputs including copper and steel products.
Spending and Employment Causes for Concern
The most recent construction spending data, which pertains to July, showed ongoing declines in nonresidential activity. With the exception of data centers, virtually no private subsegments have exhibited growth over the past year. As a result, industrywide employment declined in each of the last three months for which data is available.
Looking Ahead
The lack of data releases in October has made it difficult to assess the industry’s health. The one certainty, however, is that the extraordinary level of uncertainty that has defined the past several months remains firmly in place.
