Industrial / Commercial Global Construction Newsletter
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Q1 2025
Executive Summary:
President-elect Donald Trump has recaptured the presidency of the USA & will become the 47th President of the USA. President-elect Donald Trump has vowed to commence mass deportations of illegal individuals & workers as soon as he takes office on January 20th. President Trump also has pledged to impose new tariffs at a rate of 25% on Mexico, Canada & Chinese imports unless illegal immigrants & drugs (fentanyl) are not immediately stopped from entering the USA.
President Trump’s proposed tariffs could significantly disrupt ongoing & future capital construction projects. If these tariffs become reality, current & future EV battery, data centers, O&G & industrial manufacturing construction projects could suffer, with increased costs & schedule delays related to electrical items such a switchgear, transformers, lighting fixtures, MC centers that even now are experiencing delivery delays. These proposed tariffs could possibly impact three of the most active construction categories (1) Data Centers, (2) EV production / batteries type facilities & (3) Express packages / mail logistic centers.
Even if President Trump’s tariffs become a reality the Global Construction Industry is set to embark on an amazing expansion in the next 15 years growing from $11.5 trillion today to a $20 trillion market, a 75% increase! India, China, USA, Brazil, Saudi Arabia, Indonesia, Vietnam & Canada will be the main countries that fuel this dramatic expansion. The Global construction markets are forecast to grow in 2025, this growth will be marginal, however this is a positive trend when looking back over the last three years. Infrastructure and industrial related construction will be the construction sectors that drives this growth. The ongoing Israeli Hezbollah and Hamas conflict has a real possibility of turning into a full-blown war that could escalate to initiate Iran & the USA getting militarily involved.
The (3) countries that are the leading importation suppliers of construction materials into the USA are China, Canada & Mexico they supply more than 75% of the lumber, plywood, electrical fixtures, paint products, plumbing fixtures, HVAC components & other miscellaneous construction items.
| Countries | 1st Q 2025 % GDP Growth | 1st Q 2025 Inflation % | 1st Q 2025 Unemployment % | Comments on Construction in 1st Q of 2025 Future Spending Activity |
|---|---|---|---|---|
| USA | 2.7 – 3.2 | 2.4 – 3.1 | 4.1 | Trumps election win in November has produced both optimism & some nervousness among many US based construction sector. The possibility of less rules & regulations & easier permitting process is weighed up against possible tariffs & labor shortages. Extreme shortages of skilled labor such as Pipefitters, Welders, Electricians and Instrumentation technicians continue to be a serious problem to the US construction industry. US construction inflation will continue to remain in the 2.6% to 3.1% range for the next 3 to 6 months. Lower interest / borrowing rates will positively impact the US Commercial / Housing sector. The good news for the US construction sector continues, we have seen various announcements of plans to build a number of Electrical Vehicle Manufacturing / Battery Facilities, Semi-Conductor / Computer Chip Facilities, Call Centers, Logistical Centers and Fulfillment type facilities in many regions across the country. The USA is making noteworthy advances over some of its economic rivals with the CHIPS / Science act passed in mid-2023 and costing more than $50 billion that funds various computer chip manufacturing / high-tech facilities. |
| Canada | 0.9 – 1.4 | 2.1 – 2.4 | 6.3 | The Canadian infrastructure, civil engineering, mining and Oil & Gas construction sectors are experiencing a pick-up as we move further into 2025. Ontario, British Colombia and Quebec appear to the busiest Canadian Provinces for construction, with a mixture of Commercial, Infrastructure, Industrial and Residential construction activity. The Canadian unemployment is currently at 6.4%, with construction a marginally higher at 6.7% to 7.2%. |
| Brazil | 3.3 – 3.9 | 4.2 – 4.8 | 6.2 | The Brazilian construction sector is estimated to be a $130 to $150 billion market or close to 6.5% of the country’s GDP.
Brazil is Latin America's largest economy; it is a member of BRIC’s it will be interesting to see the reaction of Brazil’s left leaning Government with the USA new right leaning President. |
| United Kingdom | 0.8 – 1.1 | 2.2 – 2.5 | 4.2 | The UK & specifically the London immediate area remains a leading economic & business center, however the rest of the UK continues to struggle.
A number of multinational internet / online procurement type technology company have decided to invest in new UK facilities, this $6+ billion investment will commence in the next 18 months and will employ more than 3,500 construction workers and will lead to 1,000’s of permanent well-paying technology jobs. |
| Germany | 0.1 – 0.3 | 2.1 – 2.4 | 3.5 | Germany continues to be the major economy in the EU. Economic activity in Germany is expected to decline by1.7% in 2025. Glumness flourishes in the Gaman construction sector, the last 3 years have been extremely difficult, a change of Government might help the situation for German construction related firms in 2025. Tech-billionaire Elon Musk has endorsed the German Alternative für Deutschland party on X, writing: "Only the AfD can save Germany."
Germany has just signed a major deal with Norway to purchase a large amount of gas over the next 20 years valued at many billions of dollars. |
| France | 1.1 – 1.3 | 1.7 – 2.2 | 7.3 - 7.6 | Latest feedback from France is that the Construction Industry should see an uptick in construction activity in 2025. Numerous French CAPEX projects were put on hold in 2023 due to the Russian / Ukraine conflict. Construction activity in France is gradually starting to improve. The French Government is projected to increase future expenditures on new and refurbished roads, bridges, ports / airports and rail facilities. France’s inflation rate is improving at 1.5% to 1.8%, look for this rate to start to trend downwards in the next 3 to 6 months. |
| Russia | 3.2 – 3.4 | 7.9 – 8.5 | 2.4 – 2.7 | Russia's ruble dropped recently to a 2-year low against the dollar on fresh sanctions and surging tensions
Unfortunately, the Russia-Ukraine conflicts has impacted the Global Economy and Global Construction Sector, look for this problem to continue until a peaceful solution can be found. Are sanctions against Russia working? Not really. The Russian Ruble is currently performing reasonably well against other major currencies, the Russian Ruble has been resuscitated by enhanced crude oil exports to both China and India. |
| Japan | 0.2 – 0.4 | 2.1 – 2.5 | 3.3 – 3.6 | Japan’s construction industry is forecast to grow by 0.3% in 2025 very similar to previous years. Japan's construction industry for the seventh year continues to experience slow or minimal growth in its civil / infrastructure, home building, commercial, institutional and industrial sectors, perhaps mirroring Japan’s steadily declining and aged population. |
| China | 4.3 – 4.7 | 0.4 – 0.7 | 4.1 – 5.1 | The construction sector in China is slowing down as we move further into 2025; it appears that the overall economy is facing challenges. 2025 will be a less than stellar year for the Chinese construction sector. China is the second most powerful nation that continues to expand its influence by providing loans & EPC capital infrastructure projects in Asia, South America, Africa & the Middle East ever-increasing China's authority in countries that historically looked to the USA for leadership. China has some challenges that have slowed down the overall economy and construction sector. However, GDP growth is still reasonably high at 4.3 to 4.5%. China’s Government reported inflation of 0.5% in 2024 which is very low compared to other major countries, this rate is possibly open to interpretation similar to the low COVID casualty rate reported by China, some economist believes the real rate is between 2.5% and 3.7%. |
| India | 5.3 – 6.8 | 5.9 – 6.6 | 7.7 – 8.2 | India’s construction sector has been growing at a record pace in the last 5 years. India is set to become the 3rd largest Construction Market by 2025 only trailing the USA and China, will we see India overtake China in the next decade, stay tuned. India currently is experiencing a booming period; India is one of the world’s fastest growing economies. India’s construction sector is making significant headway, a visitor to India will see significant construction activity (roads, factories & new building) in just about all of India’s 28 states & 8 unions. The Indian construction market is forecast to be a $1.25 to $1.30 Trillion market by the year 2030. India has overtaken China in as the world’s most populated country in 2024, with a population of 1.45 billion. India and China are serious rivals, both countries have stationed a significant number of troops on the disputed border region that could turn out to be a “ticking timebomb” now and in the future. |
1st Q 2025 Prices at a Glance:
- Forecast Cost of a barrel of Crude Oil $75 – $80
- Forecast of Euro / US $ Exchange Rate 0.90 – 0.95
- Forecast of UK Pound / US $ Exchange Rate $1.25 – $1.30
- Forecast of Copper per pound $4.00 – $4.15
- Forecast of Gold per Ounce $2,600 – $2,750
- US Construction Material Inflation (Basket of 10 construction materials) 2.7% – 3.1% – Average 2.9%
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