United States Construction Market 2022: Industry is Expected to Rebound at an Annual Average Growth Rate of 3.2% from 2023 to 2026 (2024)

FAQs

What is the growth rate of construction industry in USA? ›

The construction market size in the US was $2.3 trillion in 2023. What will the US construction market growth rate be during the forecast period? The construction market in the US is projected to achieve an AAGR of more than 4% during 2025-2028.

On a year-over-year basis, spending on construction projects increased 13.9% in December. Overall construction spending increased 7% for all of 2023. Investments in private construction projects jumped 0.7% in December after advancing 1.1% in the prior month.

AIA Consensus Forecast for 2024

Spending on commercial facilities will be flat this year and next, manufacturing construction will increase significantly in 2024 before stabilizing in 2025, and institutional construction will enjoy mid-single-digit gains in both years.

New construction starts grew 16.7% in 2022 to a value of $912 billion. This was the strongest pace of growth since the series began in 2005 and follows on from growth of 10.8% in 2021. In current dollar terms, U.S. construction is 10% above its pre-pandemic high in 2019.

Employment Growth Projections by Industry

Construction employment is projected to grow just 1.5% from 2022 to 2032, compared to an average 2.8% rate of job growth across all industries.

North America Construction Market Analysis

The North America Construction Market size is estimated at USD 2.46 trillion in 2024, and is expected to reach USD 3.11 trillion by 2029, growing at a CAGR of 4.82% during the forecast period (2024-2029).

Spending on nonresidential buildings will see a minor 4% increase in 2024 despite a 20% increase in 2023, according to the AIA's latest Consensus Construction Forecast. In 2025, meanwhile, the pace is expected to slow to just over 1% growth.

U.S. construction costs are set to increase by 3% to 6% in 2024, following an average increase of 4% in 2023, according to a report published by Currie & Brown, a of cost management, project management and advisory service.

Construction spending shot up 11.3% on a year-on-year basis in November. Spending on private construction projects increased 0.7% in November after rising 1.2% in October. Investment in residential construction advanced 1.1% after rising 2.0% in the prior month.

For 2022, NAHB forecasts a small 1.7% drop in overall starts, spurred by a 6.2% decline in multifamily housing. Both forecasts indicate a slower growth for single-family starts.

Where is construction booming in 2022 usa? ›

Massachusetts—one of the most expensive states for housing due to low supply—saw the value of new residential housing permits increase by more than a third from the first months of 2021 to the same period in 2022. Another high-cost state, Hawaii, had an increase of 28.2% over the same span.

In particular, the Midwest region of the U.S. has experienced the greatest increase in the value of new residential construction. From the first quarter of 2020 to the first quarter of 2021, the value of new residential building permits in the Midwest was up 38.1%.

According to IBISWorld, the construction industry grew at a pace of 3.2% per year from 2017 to 2022. In the first quarter of 2020 alone, the construction industry added over $900 billion to the U.S. economy—the highest addition since the 2008 Great Recession.

In particular, the Midwest region of the U.S. has experienced the greatest increase in the value of new residential construction. From the first quarter of 2020 to the first quarter of 2021, the value of new residential building permits in the Midwest was up 38.1%.

Construction is a major contributor to the U.S. economy. There were more than 919,000 construction establishments in the U.S. in the 1st quarter of 2023. The industry employs 8.0 million employees and creates nearly $2.1 trillion worth of structures each year.