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Top Construction Industry Trends for 2025: The construction industry is constantly evolving, driven by new technologies, sustainability goals, and efficiency demands. As 2025 unfolds, new trends are transforming the industry, driving innovation, efficiency, and sustainability. Primary trends shaping the industry are as follows:
1. Smart and Sustainable Construction – Sustainable construction reduces environmental impact, lowers energy costs, increases efficiency, and meets government regulations for green building standards. In 2025, the construction sector will see a significant shift toward green building materials, energy-efficient designs, and net-zero buildings. Beyond materials, sustainability efforts are being enhanced by smart construction technologies. AI-powered building management systems optimize energy usage, while Internet of Things (IoT)-connected sensors monitor environmental conditions to improve efficiency. Prefabrication and modular construction techniques are also reducing waste and cutting down on carbon emissions by streamlining production and transportation processes.
2. AI and Automation in Construction – Artificial intelligence (AI)-powered tools enhance decision-making, optimize resource allocation, reduce costs, and boost overall productivity. As labor shortage challenges continue, automation ensures projects stay on schedule while maintaining high-quality standards. From AI-driven project management software that streamlines scheduling and budgeting to robotic bricklayers and 3D printing that accelerate construction timelines, these technologies are reshaping the industry. AI-powered drones and autonomous machinery are also improving site inspections, enhancing worker safety, and reducing manual labor demands. Beyond construction sites, predictive analytics is helping companies anticipate maintenance needs, reduce downtime, and optimize material usage.
3. Modular and Prefabricated Construction – This approach allows for better quality control, lower material costs, and reduced on-site disruption. Prefabrication and modular construction are becoming the go-to methods for faster, cost-effective, and scalable building solutions. In 2025, more projects will be built off-site in controlled environments before being transported and assembled on-site. This approach minimizes waste, reduces project timelines, and enhances worker safety by limiting exposure to hazardous job site conditions. Advancements in 3D printing, automation, and digital design technologies are making modular construction even more efficient. With customizable and reusable components, companies can create high-quality, durable structures tailored to specific needs. Prefabricated solutions are also gaining traction in infrastructure projects, including bridges, hospitals, and housing developments, where speed and precision are critical.
4. Smart Infrastructure and Digital Twin Technology – Digital twins improve long-term durability, reduce maintenance costs, and optimize structural integrity. By enabling data-driven decision-making and proactive problem-solving, this technology enhances safety, extends the lifespan of infrastructure, and minimizes costly downtime. Smart cities require smart, data-driven infrastructure to support growing populations and evolving urban needs. Digital twin technology, a virtual model of a physical structure, enables real-time monitoring, predictive maintenance, and enhanced decision-making throughout a building’s lifecycle. By integrating IoTsensors, construction firms can track performance metrics, detect structural weaknesses, predict failures before they occur, and optimize energy consumption. Beyond individual buildings, digital twin technology is being applied to entire infrastructure networks, including bridges, highways, and utilities. This innovation allows engineers and city planners to simulate various scenarios, from extreme weather conditions to traffic patterns, ensuring that structures are resilient, efficient, and sustainable.
5. The Rise of Construction Drones and Robotics – These technologies enhance worker safety by reducing exposure to hazardous environments, lower operational costs by automating labor-intensive tasks, and improve data accuracy for better decision-making. Drones are no longer just for aerial photography, they have become essential tools for site surveying, progress tracking, and safety inspections. Equipped with LiDAR sensors and high-resolution cameras, they can quickly map construction sites, monitor work progress in real-time, and identify potential hazards before they become costly issues. They also improve communication between project managers and stakeholders by providing detailed aerial imagery and live site updates. As labor shortages continue to challenge the construction industry, drones and robotics will play a critical role in bridging the gap and increasing productivity.
6. Addressing the Workforce Shortage with Technology – Technology-driven workforce solutions ensure projects stay on track despite labor shortages, enhance worker training, and reduce safety risks, ultimately leading to higher efficiency and lower costs. In response to the labor shortage, companies are adopting automation, AI-driven training programs, and wearable technology to improve worker efficiency, safety, and skill development. AI-powered virtual training simulations are helping new workers learn complex tasks in a risk-free environment, while exoskeletons and augmented reality tools enhance workers’ strength and precision, reducing fatigue and workplace injuries. Additionally, wearable technology, such as smart helmets, biometric sensors, and GPS-enabled safety vests, is being used to monitor worker health, prevent accidents, and improve on-site communication. These innovations not only compensate for labor shortages but also create a safer, more productive workforce.
Contractor Confidence Hit by Tariff Fallout: According to Associated Builders and Contractors (ABC), over 40% of contractors anticipate a slowdown in profit margins within the next six months. Although backlog has improved, contractor confidence dropped in March as tariff-related impacts dampened optimism, according to an ABC survey conducted from March 20 to April 6. Around 80% of the contractors surveyed said suppliers notified them of tariff-related materials price increases, while 20% had projects paused or interrupted because of tariffs. Fewer than 26% of contractors expect profits to grow over the next six months, and more than 40% anticipate a decline. Nonetheless, the backlog jumped to 8.5 months during the month, up 0.2 months from February.
The increase in March backlog reflects contractor activity and sentiment before the latest round of tariffs took effect, said Anirban Basu, ABC chief economist. “Backlog increased in March and contractors remained optimistic regarding the future, but this largely reflects contractor activity and sentiment prior to April 2, when the most consequential economic policy in several decades was announced,” said Basu.
Although hiring expectations improved in the latest survey, concerns about profit margins and sales expectations have intensified. That’s particularly true for respondents who completed the survey after the tariff announcement. Despite these concerns, builders across all nonresidential sub-segments still tacked on projects to backlogs in March. That said, infrastructure remains the only category with significant year-over-year gains, according to ABC. Basu said ripple effects from tariffs have surfaced in the construction pipeline outlook. “These tariffs have already materially diminished the outlook for construction activity in 2025,” said Basu. “Many businesses are poised to delay or even cancel planned capital investments given the current business environment and daily market convulsions.” Although activity has not yet fully slowed, Basu cautioned, “Conditions will likely deteriorate further if elevated tariff rates remain in place for any meaningful length of time.”
Construction Jobs Drop 42% Year-Over-Year: Demand for construction workers has softened in recent months amid uncertainty stemming from President Trump’s tariffs. According to data released by the Bureau of Labor Statistics, as of the end of January, the U.S. had 236,000 open, unfilled construction jobs, representing a 42% decline from the same month in 2024. The data measures jobs for which employers are actively hiring. Though January job openings were up 15% from the end of December, the general decrease in openings in recent months indicates a trend of uncertainty.
“The continued decline in job openings suggests that while demand for workers remains, contractors are becoming more cautious about hiring amid uncertainty about tariffs, project pipelines, and future economic conditions,” said Macrina Wilkins, senior research analyst for the Associated General Contractors of America. Despite job openings remaining reduced at the end of January, there was significant turnover during the month, noted Anirban Basu, chief economist at Associated Builders and Contractors. “Both hires and separations, including layoffs, discharges, and resignations, accelerated to the fastest rate since the first half of 2024,” Basu said in a statement.
Total discharges year-over-year were nearly identical, with 1,000 fewer in January 2025 compared to the same month a year earlier. However, they did increase by 25% from December 2024 to January 2025. Layoffs dropped about 18.5% from the previous year. “Although layoffs have also declined, the sharp drop in job openings indicates that firms are hesitant to take on new projects or expand their workforce at this time as contractors navigate an evolving and uncertain economic landscape,” Wilkins said. Meanwhile, resignations rose about 21% year-over-year and 47% from December. Basu acknowledged that concerns over volatile trade policy stemming from the President’s back-and-forth tariff policies may have slowed construction and therefore softened demand for jobs. However, ABC members indicated their intent to continue to hire more workers in the coming months.
Labor Shortages and Changes to Immigration Policy: Foreign-born workers make up nearly 25% of U.S. construction labor. As such, changes in immigration flows or enforcement can lead to labor shortages or surpluses, affecting both wages and productivity. These workers often fill critical contractor and laborer roles. Prior to the pandemic, tighter immigration enforcement and reduced inflows of new immigrants contributed to a contraction in construction labor supply. Stricter immigration enforcement resulted in measurable drops in homebuilding and higher house prices in affected regions.Deportation policies can also create bottlenecks that reduce employment of U.S.-born skilled workers, because projects slow down. Construction projects build on each other; if framing or roofing isn’t done, the entire project stalls.
According to the Bureau of Labor Statistics, in 2021-2022, the industry was in a severe labor crunch with historically high job openings (over 300,000 unfilled construction jobs) and an aging, skilled workforce. The U.S. lost many workers in the construction sector during the housing bust. That shortage was compounded by the pandemic, as many older workers retired and border restrictions limited the inflow of workers. The shortfall drove up construction wages and caused project delays due to a lack of crews. Many contractors saw productivity dip as they operated shorthanded.
In 2022-2023, net immigration returned, passing pre-pandemic levels, and the construction industry benefited substantially: In 2022 alone, about 130,000 new immigrants entered the construction workforce, the largest influx in over 15 years. By 2023, the foreign-born share of construction workers hit a record 25.5% as the total number of immigrant construction workers reached 3 million. A recent Federal Reserve analysis noted that rising immigration cooled off the overheated labor market and tempered wage growth in late 2023. When the labor supply is tight, wages tend to be bid up, especially for lower-skilled positions. The resurgence of immigrant workers helped cool excessive wage growth that had been contributing to inflation.
By one estimate, the U.S. needs to add roughly 740,000 construction workers per year for the next few years to keep up with demand. This includes replacing retirees and providing for new growth. The native-born workforce alone is not growing fast enough to meet this demand. The median age of a construction worker is 42 years old, and younger Americans have been less inclined to enter construction trades. Gen Z, the youngest generation in the workforce today, makes up only 16.8% of construction workers. If immigration is restricted, the labor shortfall could persist or worsen, leading to chronic project delays, higher labor costs, and potentially a drag on construction sector growth.
Trends in Used Equipment Values
The used construction equipment market sent mixed signals in March. Trends varied widely across heavy-duty, medium-duty, and lift equipment categories, highlighting the complexity of current demand and pricing dynamics. Buyers are acting cautiously, paying close attention to interest rates, tariffs, and commodity prices,
Specific observations regarding U.S. trends related to the used heavy-duty construction equipment and lifts are as follows:
U.S. Used Heavy-Duty Construction Equipment
Inventory levels for used heavy-duty construction equipment, which includes crawler excavators, dozers, and wheel loaders, have been decreasing for several months. This continued in March with a 0.28% decrease month-over-month, although inventory levels in this market rose 3.33% year-over-year. Used wheel loaders led the way in year-over-year inventory increases at 14.22%. Asking prices in this market decreased by 0.62% month-over-month and 3.85% year-over-year and are trending upward. Used crawler excavators led all other categories in asking value declines, down 5.11% year-over-year. Used wheel loaders followed closely behind with a 5.09% year-over-year drop. Auction values are also trending upward despite decreases of 0.23% month-over-month and 2.88% year-over-year in March. Used crawler excavator auction values declined 1.34% month-over-month, more than other categories, while used wheel loaders led in year-over-year auction value decreases with a 6% change.
U.S. Used Lifts
The lift equipment market saw inventory expand significantly in March, up 3.52% month-over-month and 17.87% year-over-year, continuing an upward trend. The largest inventory increases occurred in used telehandlers, up 5.16% month-over-month, and used cushion tire forklifts, up 36.33% year-over-year. However, prices continued to fall: asking values dropped 2.49% month-over-month and 9.74% year-over-year. The used telehandler category posted the largest month-over-month asking value decrease at 5.72%, and the used rough terrain scissor lift category showed the largest year-over-year decrease at 14.2%. Auction values for lift equipment slipped 0.88% month-over-month and 6.19% year-over-year, but are trending sideways. Telehandlers again led in monthly declines at 3.69%, while cushion tire forklifts saw a substantial 18.06% drop over the past year.