IMA – Economic Overview & Market Update - Construction, 4Q 2025

The main topic of the report is the analysis of the current state and future prospects of the construction economy.

Key findings include: Overall construction spending declined by 2.8% year-over-year, primarily due to weakness in the residential sector (-5.1%). Non-residential construction remains strong, supported by data center projects and infrastructure growth in the southern U.S. Government construction spending increased by 43.6% over three years, despite a recent government shutdown. Rising material costs, especially copper and natural gas, are pressuring budgets, though falling crude oil prices provide some relief. Labor market conditions remain tight, with employment in the residential sector down 0.8% and wages up 3.7%. Inventories remain stable (+0.3% year-over-year), project stress indicators are decreasing, but the Architectural Billings Index remains below 50, indicating potential future slowdown. Despite challenges such as inflation, labor shortages, and economic uncertainty, strong government spending and major non-residential projects provide a basis for cautious optimism.