Non-residential construction spending forecast in the U.S. 2024-2025

Based on short-term projections, the U.S. non-residential construction market is expected to increase by approximately four percent in 2023. That year, growth is expected to be the highest in the industrial construction segment, with a year-on-year change of 8.9 percent. Offices were the buildings with the highest expected decrease, with its growth rate for 2024 forecast at -1.7 percent. The value of private non-residential buildings put in place in the U.S. remained stable between 2019 and 2021, but it has risen in the years after that. That was similar to how public non-residential construction has evolved, which also had a noticeable growth in 2023. 

Non-residential construction market

There are various drivers that impact the non-residential construction market and can be highly dependent on the sector. Demand for leisure travel is expected to increase due to low unemployment and income growth, projecting a promising lodging construction market. The growth in the office building market is largely being guided by corporate relocations and the lack of vacant spaces in major metropolitans. The overall commercial construction market has received increased spending due to growth in e-commerce, gas prices, and interest rates.

Industrial real estate receives most investment

During the past years, the value of investment in commercial real estate in the U.S. has been on the decline. That has affected industrial and office real estate the most, which were also the segments of the commercial real estate industry with the highest investment. Offices received the most investment in 2019, but it was below the industrial and retail segments in 2023. Part of the reason might be that since the outbreak of the COVID-19 pandemic, working from home has become a popular option, reducing the need for more office space for certain companies.