Courtesy Curtis Lumber
By Doug Ford
As we step into 2025, I remain optimistic about what lies ahead for the construction industry, even though there is much uncertainty. The construction industry, along with companies supporting it like Curtis Lumber, faces a year that will blend both opportunity and caution. Let’s take a closer look at what we know, what we think we know, and the unknowns that could influence the year ahead.
The outlook for construction in 2025 is generally optimistic, especially for residential and multifamily projects. Nationally and locally, growth is expected, but experts predict commercial construction will slow compared to previous years. Residential and multifamily construction remains robust as demand for housing continues, despite challenges such as rising interest rates.
That said, there are still plenty of unknowns that could impact the industry. Much of this uncertainty stems from the new administration and its policies. Changes in leadership can significantly impact the construction sector, especially when it comes to regulation and funding for infrastructure. We are likely to see a focus on reducing regulations and prioritizing traditional infrastructure and energy projects, which is positive for the industry. However, there may be less emphasis on renewable energy projects, and potential labor impacts due to stricter immigration policies or rising tariffs could add costs. Only time will reveal how these factors will play out.
A major concern for the construction sector is the ongoing labor shortage. According to a recent AGC survey, over 90% of contractors struggle to fill positions across all levels. Despite efforts to raise awareness and encourage more people to pursue careers in the trades, these challenges persist. Locally, the Northeast Construction Trades Workforce Coalition (www.NCTWC.org), which I co-founded with Pam Stott, is working to bridge this gap by increasing awareness of career opportunities in the construction trades. Research has shown that many young people are unaware of the trades, largely due to a lack of accurate information provided by school counselors (no fault of theirs) and parents. Through our extensive research we have realized the construction industry has done very little to engage with the schools and provide the tools and resources necessary for the counselors. Additionally, parents are basing their knowledge of the trades on what they saw growing up, which is very different today.
While we’ve made significant progress in our region, more work remains. Our continued advocacy will help ensure that young people have the tools they need to make informed decisions about their future careers. However, this issue is not something that can be solved overnight, and it will remain a limiting factor for the industry.
The national housing market has been sluggish over the past two years. Mortgage rates have played a significant role in this, as higher rates make it more difficult for buyers and builders alike. While most economists do not anticipate a significant drop in mortgage rates, the elevated rates and continued growth in home prices will make homeownership a challenge for many. Zillow forecasts a 2.6% increase in home values in 2025, while Realtor.com predicts a 3.7% rise in prices.
These factors will continue to influence both homebuyers and builders, as the cost of purchasing and constructing new homes remains high. Builders may have to adjust their strategies to remain competitive in this market.
Despite these challenges, there is a silver lining, particularly in the Capital Region of New York. The area remains a bright spot, showing resilience and growth despite broader uncertainties. As we move forward, it’s essential for those of us in the building materials and construction industries to continue adapting and working together to navigate the ever-changing landscape.
While the year ahead is filled with both opportunities and challenges, one thing is clear: we must stay agile, informed, and committed to overcoming the obstacles that come our way. Here’s to a productive and successful 2025.