For a look at what contractors might expect to encounter throughout the year, Ken Simonson, chief economist at Associated General Contractors of America (AGC), offers a glimpse into the coming conditions and challenges.

Simonson: Construction is more dependent than most industries on imported materials and foreign-born workers. Imposition of tariffs and limits on immigration or expanded deportation measures will drive up costs, snarl supply chains, slow projects, and potentially lead to project cancellations.

Simonson: Although construction activity grew more slowly as the year progressed, contractors continue to cite difficulty in finding qualified workers as their greatest challenge. Materials costs and availability largely returned to normal with the significant exception of transformers, switchgear, and other electrical equipment, which continued to have long lead times.

Simonson: Construction spending and employment will continue to increase at a moderate rate. But there is much more uncertainty about which market segments and geographic areas will thrive or dive in '25 than appeared to be the case a few months ago. Tariff, tax, spending, immigration, and monetary policy are all murkier than previously.

Simonson:Demand for data centers is likely remain torrid and may even accelerate further. There will also be demand for new manufacturing plants, even as the timetable and investment slip somewhat for semiconductor and electric vehicle plants. The downturn in demand for warehouses and apartments will moderate and may reverse by year-end or early 2026.

Simonson: Make purchasing or leasing decisions with an eye on the possible impact of tariffs on the cost and availability of equipment.

Simonson: The Trump administration can enable faster and more efficient construction of infrastructure and private structures through selective repeal of regulations and better streamlining and coordination of project reviews and approvals. It is essential that the administration allow waivers from tariffs or immigration restrictions for construction projects that otherwise would be unduly delayed or cost-burdened.

Pain lots of pain is coming for construction. Data centers are keeping the construction sector a float at the expense of Americans looking to purchase a new home or a rent cheap apartment will have to wait. Hopefully in 2026 the construction sector can find growth beyond data centers