Last updated: Construction trends 2025: A tech reckoning, workforce development, and greener building

Construction trends 2025: A tech reckoning, workforce development, and greener building

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The construction industry is a major contributor to the global economy, accounting for an estimated 14% of gross domestic product and employing millions. But despite its powerhouse economic role, the industry lags behind in productivity growth and innovation. The top construction trends 2025 highlight changes the industry needs to make in order to reach its potential.

And the potential is huge. McKinsey estimates that the industry could grow nearly 70% by 2040, a massive increase from the $13 trillion gross annual output from global construction projects as of 2023.

To increase the growth rate from the current 1.3% to the necessary 2.7% CAGR to reach those 2040 projections, construction companies will need to update their tech stacks in order to maintain the best workforce and improve sustainability.

Top construction trends for 2025

There are a lot of positive signs for the construction industry, according to Deloitte. Better economic conditions with lower interest rates could generate demand and government initiatives such as the Infrastructure Investment and Jobs Act could spur growth, the firm said in its industry outlook for 2025.

Globally, the amount of construction work will reach nearly $14 trillion by 2027, up from $9.7 trillion in 2022, with most of the growth driven by China, the US, and India, according to Oxford Economics.

Construction firms that want a piece of this growth will need to update their IT infrastructure and take advantage of new technologies. Here are the trends to watch this year:

  1. Get real about digital transformation: Lagging behind other industries in technology adoption, the construction industry will play a serious game of catch up in 2025.
  2. Put artificial intelligence to use: AI promises to reduce risk, increase safety, reduce repetitive tasks like invoice processing and matching, and keep operations on schedule.
  3. Build up pipeline of skilled labor: Construction firms need to make workforce development a priority in 2025 by focusing on skills recruitment and development.
  4. Mix sustainability into all projects: The industry will work to reduce its impact on the environment by ramping up green building and using tools to spot ways to minimize waste.

1. Construction 2025: Go digital or go home

The construction industry has been slower to adopt technology, spending under 1% of revenue on IT historically, which is a third less than the averages seen in the automotive and aerospace industries, according to McKinsey.

This makes catching up on digital transformation a top trend for 2025. Shifting away from manual processes boosts efficiency, productivity, and collaboration across the industry—making it possible to achieve ambitious growth goals.

Gartner estimates that 45% of construction organizations use manual methods. The firm cites many software tools that help the industry with estimation, budget allocation, proactive adjustments, and more to improve communication, keep projects within budget, and free up time for strategic decision-making.

Construction leaders are implementing software to get them into the digital age. This helps them streamline data into a single source of truth so that employees can access timely information on finances, process adherence, project management, operational accuracy, and progress toward goals.

Key areas where construction companies are plugging in digital tools include:

  • Tracking real-time project details to understand progress made and to deliver on time
  • Paying customer bills and subcontractors with the help of jobsite progress data
  • Determining and updating scheduling, plans, and project logistics
  • Sharing project data with partners and collaborators
  • Complying with safety and sustainability regulations
  • Modernizing procurement and strengthening supply chains
  • Driving efficiency and improving resource planning to stay on budget

For example, Square Engineering, an Egyptian architectural and construction firm, reduced operating costs by 10% in one year with the help of cloud-based enterprise resource planning software. The company also cut down on the time and effort involved in managing construction projects. With their new single source of truth, they’re seeing better workflows and an increase in profit as well.

By unifying disparate data and giving leaders an overarching view of active projects, they’re able to better manage their finances, materials, operations, and collaboration.

Technology can help construction firms bridge the gap between finance teams and field operations, making sure field activity data is accessible alongside site management and back-office information. When all teams are aligned, companies will see better efficiency and accuracy across the full construction lifecycle—from initial bid to project handover.

2. Putting data and AI to work in construction

AI is coming for every industry with the promise of aggregated and actionable data. Mordor Intelligence estimated that the market for AI in construction will reach nearly $12 billion by 2029, up from close to $4 billion in 2024, growing at a CAGR of 24%.

With this huge spike in AI, use cases are exploding across engineering, design, operations, asset management, and more. In the construction industry, the AI trend promises to minimize risk, increase safety, reduce repetitive tasks like invoice processing and matching, and keep operations on schedule.

Most immediately, AI can save time and money by breaking down RFPs and prioritizing claims to avoid delayed payments.

Putting this technology layer on top of data makes it possible to augment institutional knowledge and old systems of record. AI can help with the RFP process, serving as a flawless repository of all past projects so that it can generate new bids faster. It can also improve the quality of project plans that come next, accurately estimating required materials and timelines to keep projects on track.

With the help of AI, the construction industry can drive value by improving bid timelines, contract win rates, and help with profitability, efficiency, and sustainability goals. It does this by unifying data that covers costs, deadlines, design specs, energy usage, and sustainability considerations and optimizing it for better results.

The next step is communicating these benefits to relevant teams and putting all of this information at their fingertips. When teams have a single source of truth, everyone can stay on track with changing project plans on the fly such as a switch to new building materials, staffing changes, and updates to initial designs. They also gain insight to drive innovation.

Finally, AI-driven tech can reduce worksite injuries and more tightly control access to construction sites with facial recognition integrated into cameras, drones, wearables, and smart sensors.

3. Construction trend: Recruiting and developing skilled workers

The construction industry needs a consistent workforce with the skills and technical know-how needed to deliver projects efficiently. But this has proven difficult industry wide: between 2017 and 2023, average US construction vacancies increased from 200,000 to 380,000, according to Bureau of Labor Statistics.

According to the Associated Builders and Contractors (ABC) trade association, nearly one in four construction workers in the U.S. are 55 or older. Last year, 9 million construction workers were expected to leave the industry.

These statistics highlight a top construction trend in 2025: addressing the labor shortage in construction. Hiring and retaining new talent is the only way to complete existing contracts on time and create a pipeline of new talent to meet growth targets.

Companies that don’t make a plan to overcome the labor shortage now are already experiencing the pain. A $40 billion Taiwan Semiconductor Manufacturing Company chip factory in Arizona was expected to open in 2024, but had to postpone opening to 2025 due to worker shortages.

Many forward-looking companies are starting to look into Gen Z hiring to make up for the outgoing retirees and build an incoming workforce with the tech skills to get things done faster. Attracting young talent will help companies avoid the estimated $40 trillion the industry is set to lose out on by 2040 if productivity and workforce growth don’t pick up.

To prep a construction workforce for the future, companies should consider training programs that put AI skills first for new and existing hires alike. After recruiting and onboarding employees with the right work history and certifications, these programs can also help with ongoing education and mentorship to keep younger workers engaged.

4. Sustainable construction trends up in 2025

The UN Environment Programme considers the construction and building industry to be the worst greenhouse gas emitter, making up 37% of global emissions.

To lower this astounding number, construction companies must focus on reducing their environmental footprint. Digital technologies can be especially helpful with this by spotting areas to reduce waste or use alternative green materials.

With the UN’s goal of getting to net zero emissions in the sector by 2050, there needs to be rapid changes and innovations to make the built environment more eco-friendly. The UN suggests three ways to do this: avoid unnecessary extraction and production, shift to regenerative materials, and improve decarbonization of conventional materials.

The Dodge Construction Network’s 2021 World Green Building Trends report shows that green building is becoming more popular. According to the report, 34% percent of companies in the US are focused on green building, and 46% reported that they planned to prioritize it in the next three years.

As customers start to request more green buildings and projects, construction companies that have the right capabilities can start off the RFP process with this in mind and help their customers plan for the cost and material differences.

Construction at a crossroads

With the help of technology, the construction industry is driving efficiency with a number of positive downstream impacts, such as building modular homes faster and for less. Having a strong staff onboard with the know-how and skills to leverage these tech tools to their maximum potential makes a resilient and profitable future possible.

As construction companies stretch to meet goals and adjust their practices to complete more green projects, having the technology backbone to track sustainability metrics and progress will be essential to getting it all done at scale.

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