From Slowdown to Growth: Key Trends Defining Construction Through 2029
The U.S. construction industry is approaching the bottom of its current spending cycle, with early signs of stabilization across pricing and activity. While residential construction continues to struggle under affordability challenges and elevated interest rates, anticipated Federal Reserve cuts in 2026 are expected to restore momentum, particularly in single-family housing. Multifamily construction has cooled after its recent surge, and remodeling is holding steady at low single-digit growth as homeowners tap into accumulated equity. Regional dynamics remain critical—Southern states are capturing nearly half of all national spending, fueled by migration trends, cost advantages, and resilience-driven rebuilds.
Nonresidential activity presents a more mixed outlook, but growth opportunities are emerging in health care, lodging, and amusement sectors, alongside the explosive expansion of data centers—a market projected to exceed $50 billion by 2029 as cloud and AI services drive demand. At the same time, supply chains are adapting to tariff-related cost pressures, and AI technologies are being rapidly deployed to improve bidding, pricing, and productivity across the industry. Overall, construction spending is expected to rebound from 2026 onward, with annual growth rates between 5% and 7% supported by infrastructure investment, demographic shifts, and technological adoption
