{"id":14625,"date":"2025-03-01T13:33:18","date_gmt":"2025-03-01T13:33:18","guid":{"rendered":"https:\/\/insulation.org\/io\/?post_type=articles&p=14625"},"modified":"2025-04-16T15:17:09","modified_gmt":"2025-04-16T15:17:09","slug":"2025-economic-analysis","status":"publish","type":"articles","link":"https:\/\/insulation.org\/io\/articles\/2025-economic-analysis\/","title":{"rendered":"2025 Economic Analysis"},"content":{"rendered":"

\"\"<\/a><\/p>\n

Construction Outlays Slipped in January as Potential Widespread Tariffs Threaten to Push Back Investment Decisions, Upend Costs and Supply Chain<\/span><\/h2>\n

Construction spending decreased 0.2% from December to January, with mixed results across residential, nonresidential, and public segments, according to an analysis of a new government report that the AGC released recently. AGC officials cautioned that spending on new construction projects could be negatively impacted by proposed new tariffs on a range of goods from Canada, Mexico, and China that are likely to make projects more costly.<\/p>\n

\u201cConstruction spending growth has been slowing under pressure from high interest costs and now the prospect of new waves of tariffs,\u201d said Ken Simonson, AGC\u2019s Chief Economist. \u201cThere have already been notable cancellations and postponements for major manufacturing plants, and the impacts of new tariffs are likely to lead to more delays and cancellations.\u201d<\/p>\n

Spending totaled $2.19 trillion at a seasonally adjusted annual rate in January. The total was 0.2% below from the December rate and 3.3% above the January 2024 level. Simonson noted that construction spending increased at a 6.6% rate in 2024 as a whole\u2014twice as fast as the latest year-over-year increase.<\/p>\n

Manufacturing construction spending declined 0.3% in January, and the year-over-year growth slowed to 5.6% from 20% in 2024. Simonson noted that last week alone, Air Products pulled out of three planned projects, and Intel pushed out completion of its $28 billion Ohio project from 2026 to 2031.<\/p>\n

Other major categories that slipped in January include educational construction, which fell 0.6% from December; multifamily construction, which decreased 0.7%; and private office construction, which declined 0.5%. These and other contractions outweighed increases in single-family homebuilding, which rose 0.6%; data center construction, which climbed 1.9%; and gains in several infrastructure sectors. In particular, highway and street construction spending rose 0.6% for the month, sewage and waste treatment outlays increased 0.4%, and spending on transportation facilities edged up 0.1%.<\/p>\n

AGC officials noted that the new tariffs set to start in March will make the cost of a broad range of construction materials more expensive, whether they are from Canada, Mexico, China, or from domestic producers who are likely to raise prices as well. They urged the Trump administration to work quickly to resolve the underlying disputes that are prompting the new tariffs in order to mitigate the negative impacts of the tariffs.<\/p>\n

\u201cHigher interest rates are making it harder to get private sector projects approved, and these new tariffs are likely to prompt many developers to hit pause on new projects,\u201d said Jeffrey H. Shoaf, AGC\u2019s Chief Executive Officer. \u201cWe all want to see more domestic suppliers of construction materials, but undermining demand for construction isn\u2019t the right way to
\nstimulate new domestic capacity.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Potential tariffs, coupled with high interest rates, are having an effect on construction spending.<\/p>\n","protected":false},"author":[704],"featured_media":0,"template":"","categories":[302,701],"class_list":["post-14625","articles","type-articles","status-publish","hentry","category-economy","category-march-2025","author-associated-general-contractors-agc"],"acf":[],"yoast_head":"\n2025 Economic Analysis - Insulation Outlook Magazine<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/insulation.org\/io\/articles\/2025-economic-analysis\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2025 Economic Analysis\" \/>\n<meta property=\"og:description\" content=\"Potential tariffs, coupled with high interest rates, are having an effect on construction spending.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/insulation.org\/io\/articles\/2025-economic-analysis\/\" \/>\n<meta property=\"og:site_name\" content=\"Insulation Outlook Magazine\" \/>\n<meta property=\"article:modified_time\" content=\"2025-04-16T15:17:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/insulation.org\/io\/wp-content\/uploads\/sites\/3\/2025\/04\/IO250305_01.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1788\" \/>\n\t<meta property=\"og:image:height\" content=\"1141\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/insulation.org\/io\/articles\/2025-economic-analysis\/\",\"url\":\"https:\/\/insulation.org\/io\/articles\/2025-economic-analysis\/\",\"name\":\"2025 Economic Analysis - 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