Patrick Ryan Executive Vice President of the Americas
North America’s construction industry continues to demonstrate resilience, despite persistent trade and cost pressures, with mission-critical sectors shaping long-term opportunities.
The North American construction industry is navigating a challenging environment of tariffs, rising costs and labor shortages. While Canada is forecasting modest growth, the US construction industry is expected to have contracted in 2025, reflecting the impact of these pressures. Both markets, however, are supported by strong investment in infrastructure and high-tech sectors, signaling cautious optimism for the years ahead.
Macroeconomic conditions reflect this mixed outlook. US GDP growth is projected at 2.0% in 2025, driven by AI-led productivity gains and fiscal stimulus, while Canada is forecast at 1.2%, constrained by trade tensions and weaker exports. Inflation trends diverge slightly: US inflation is expected at 2.7%, above the Federal Reserve’s target of 2.0%, while Canada remains near 2.0%, aided by moderated import prices and stable policy.
In the US, construction output is projected to have contracted by 2.7% in 2025 after recording a strong 6.5% growth in 2024, as tariffs and skilled labor shortages weighed on delivery. Data centers and advanced manufacturing remain key drivers, supported by AI investment and federal incentives, though power availability is a critical constraint. Looking ahead, an average annual growth of 1.9% is forecast from 2026 to 2029, underpinned by transport infrastructure and semiconductor projects.
Canada’s construction industry is expected to have rebounded with 2.2% growth in 2025 after two years of contraction. Infrastructure and renewable energy projects lead the recovery, alongside industrial construction gains in chemical and pharmaceutical sectors. However, labor shortages and tariff-related procurement risks remain significant challenges, compounded by recent policy changes and interprovincial trade barriers.
Commodity markets remain volatile. Copper prices rose across the region in Q3 2025 and are forecast to climb further into early 2026. Steel faces downward pressure in Canada due to oversupply, while US tariffs provide short-term support in the US market. Aluminum prices are firming, cement remains elevated as a result of infrastructure demand, and lumber costs reflect ongoing supply disruptions. Construction inflation is projected between 3.0% and 4.0% in both markets in 2025, with material costs and wage pressures sustaining upward trends into 2026.
Supply chain conditions in North America have improved, driven by the increased use of locally sourced equipment, following significant front-loading in early 2025. However, volatility persists due to tariffs, customs delays, and global shipping disruptions. Clients should prioritize long-term supplier agreements, diversify sourcing strategies, and adopt standardized designs to mitigate risk. Accurate forecasting and proactive procurement remain essential to maintain delivery certainty in this environment.
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