Associated General Contractors Construction Survey Reveals 2025 Optimism

AGC’s chief economist, Ken Simonson, along with executives of three general contractors, referenced immigration, regulation, tariffs, infrastructure spending, supply chains, and worker training as areas of concern. The prospect of related policy shifts in any direction — and how they might play off against each other — could have the industry walking a tightrope in 2025.

Labor remains the biggest problem area for contractors. Well over half of those surveyed put rising costs for labor, insufficient supply of workers and subcontractors, and worker quality on their list of possible concerns for 2025. Most don’t see those problems easing any time soon; if anything, they could worsen if the incoming administration conducts massive deportations and seals the border. The only area of concern that rivals labor in the survey is materials costs, on the top concern list of more than half as well. Together, they constitute a stubborn problem that a talked-about policy change could worsen. 

“Construction firms are worried about labor supply and materials prices, and that may reflect some concerns about the potential impact of the new administration’s possible immigration and trade policies,” Simonson says.

Though only one-quarter of respondents put immigration policy impact on labor supply as a top concern, AGC sees a link that needs to be addressed. 

“We’re urging the new administration to establish new temporary work visas for construction to help builders keep pace with its infrastructure improvement and manufacturing and semiconductor facility priorities,” says Simonson.

Rex Kirby, president of Verdex Construction, West Palm Beach, Fla., sees some reason for concern, but not panic.

“There’s some fear among our workforce, with some immigrant workers asking what will happen, ‘Am I going to be sent home?’, but we’re telling them as long as you’re not a felon you’ll be OK,” he says.

Of equal concern on labor, Simonson says, is the administration’s workforce training posture. AGC is encouraging administration pressure on the Senate to pass A Stronger Workforce for America Act that could help bolster the pipeline for trained workers the construction industry needs.

Those needs are real and greater than ever, says Andy Heitmann, vice president and operations manager for Turner Construction Company, Kansas City, Mo. On recent projects, which at one point had 1,300 electricians in the field, craft labor was comprised of 40% travelers. In addition to expanding its geographic sourcing for labor the company is also turning to more prefabrication, he says, hoping to wait out an eventual turn in the construction labor pool.

“Workforce attraction in construction has been a constant issue, and while it’s getting a bit better, we’re far behind with a long way to go.”

On the construction materials front there are growing worries the new administration could reignite a supply and cost problem that has eased somewhat but still lingers. Trump’s floating of more and higher tariffs on imports that could increase construction prices and snarl supply chains has some companies worried about slowing project demand, maintenance of profit margins and a prolonged timeline for building domestic supply to replace imports.

“Non-residential construction input costs started to come in below 2023 in the last months of 2024, but just in the last week we started seeing warnings of higher prices, like wallboard rising 6 % to 30% for February delivery in some cases,” Simonson says. “Some of that might be just testing the waters, but it looks like a year of calm might be about to end.”

Higher tariffs would be a big contributor to that, potentially affecting a broad range of construction inputs. Norbert Schulz, vice president of marketing and business development for Filanc Construction, Escondido, Calif., said the firm’s water/wastewater-focused business, which is booming, would be impacted by potentially higher tariffs on complex and high-value pumps, valves and other products sourced from Europe. Relief, however, could come in the form of Buy America waivers the administration might grant to select industries.

 Should tariff-related price increases materialize, Heitmann says his firm will explore options and brace for impact.

“We can get creative and look for alternatives in the form of different avenues on design and materials but if costs get to the point that projects don’t pencil out it could shut out or delay some projects,” he says.

A clear winner for construction in terms of incoming administration policy would be in the regulations arena. A likely first order of business will be broad de-regulation, which builders would welcome. More stalled projects could move ahead, and more new ones would be initiated. A high specific priority for AGC is a quick reversal of the Biden executive order on project labor agreement requirements for many federally sponsored infrastructure projects.

“That measure excludes two-thirds of the construction workforce from participating in those projects, severely undermining the nation’s capacity to build infrastructure,” Simonson says.

Additionally, he says, there’s hope the new administration will prioritize the streamlining of project permitting, something the Biden administration slow walked.

Few changes in administration promise to be as consequential as the impending one, and construction industry sentiment reflects that belief. But at the same time, builders may be looking beyond that. As the survey makes quite clear, it may take a lot of unexpected, unfriendly developments to sour 2025.