Industrial / Commercial Global Construction Newsletter
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Q3 2025
Executive Summary:
On the evening of June 21st, US warplanes attacked & destroyed Iran’s three extremely protected nuclear sites. President Trump announced that these three nuclear facilities were “totally obliterated.” President Trump announced an agreed to cease-fire on June 23rd of the now so-called “12-day war.” However, the cease-fire has been broken a number of times & hostilities appear to be continuing.
Of course, the recent hostilities between Israel & Iran clash could possibly disrupt the global economy & seriously impact the global construction sector, we will most probably understand the impact in the next quarter.
Israel’s assaults against Iran’s nuclear facilities & military installations intensifies additional risks to an already uncertain global economy.
Both crude oil & gasoline prices have increase by more than 10% since the start of the conflict.
Iran has threatened to close or mine the Strait of Hormuz, which is a major shipping route for oil products destined for Europe, North America & Asia. More than 25% of the world’s energy needs pass through this 20-mile-wide narrow strait.
China is a major importer of Iranian oil, if the Strait of Hormuz is closed this could cause serious economic problems for China.
Unfortunately, this conflict could set the stage for the US to become embroiled in this conflict which could have serious consequences for the global economy.
The price of gold has risen sharply as investors moved their savings to safe-haven assets.
The big question will oil prices spike to $100 + a barrel levels or more, if this conflict escalates & drags on for more than a couple of months.
President Trump previously gave Iran 60 days’ notice to comply with his request to close down their nuclear facilities.
The US Federal Reserve decided to leave interest rates as they are in their June monthly meeting.
Iran is one the world’s largest producers of oil despite US / Western sanctions. The majority of its’ oil is going to China.
Reduced gasoline & diesel prices have been good news for US consumers & the construction sector helping to tamp down prices for the last 6 months. However, this could change in the next few months if the Israel / Iran / US conflict drags on. Gasoline & diesel prices could increase by 20 to 35 cents a gallon by the end of July. The average price for a gallon of gasoline immediately after the commencement of the hostilities in the US has risen to $3.53 a gallon up from $3.12 per gallon, a 13% increase.
OPEC a month or two back voted to increase oil production by 500,000 to 1,000,000 barrels a day which will prove useful in keeping a lid on oil prices in the short term.
A long-drawn-out & escalating war in the Middle East would add more stress & challenges on an already uncertain Global economy & construction sector.
| Rank | Country | 2025 GDP $ Trillions | Latest 2025 GDP growth % | % of GDP related to Construction | Construction Inflation & Unemployed | Comments |
|---|---|---|---|---|---|---|
| 1 |  USA |
29.5 | 2.2% | 9% - 11% | 2.8% & 4.5% | The ongoing Israel vs. Iran conflict & the US involvement casts a dark shadow on future construction growth prospects. The US public are very much opposed to another endless war. We could be on the verge of a trade war between the US & China, the world’s (2) largest economies. The AI expansion is here, just d how big will AI be? The data / call center construction sector is experiencing substantial growth fueled by AI, advance micro-chip production and technology companies. |
| 2 |  CHINA |
19.3 | 5.3% | 11% - 15% | 0.5% & 5.5% | The prospects of another endless war in the Middle East is a serious problem, that most ikely will impact future construction activity & EPC costs. A potential trade war with the US will seriously impact the Chinese economy & construction sector. Latest indications are emerging that China’s economy & construction sector are experiencing a serious slowdown. The Chinese Government contributed to this problem by providing low-cost loans that sparked an oversupply of new homes & office facilities. Construction expenditures are expected to remain subdued for the next 12 months. Relations with its neighbors & USA are very strained. The halcyon days of 6% & 7% GDP growth appear to be gone. |
| 3 |  INDIA |
5.6 | 7.5% | 12% - 16% | 3.6% & 6.8% | The Israel vs. Iran conflict & the US participation could impact future EPC growth activity. The Indian economy is one of the fastest growing out of the world’s major countries. Assisted by government initiatives / investment programs, major Fortune 500 consumer goods investments. India’s construction industry is forecast to experience dynamic growth in the next 12 months. India has overtaken China in as the world’s most populated country in 2025, with a population of 1.45 billion. The military standoff between India and China in the northern Himalayan region is tenuous and threatening, with troops positioned in close proximity to each other, both countries are claiming sovereignty of the disputed border area. India and China are serious rivals, this border issue could turn out to be a “ticking timebomb” now and in the future. |
| 4 |  GERMANY |
4.7 | 0.3% | 9% - 11% | 2.3% & 3.9% | The ongoing Israel vs. Iran conflict & the US involvement casts a dark shadow on future construction growth prospects. The German economy has struggled for the last 5+ years (perhaps the lengthiest decline since the East / West 1990’s one Germany reunification). The war in Ukraine, immigration issues & a general malaise has gripped Germany. Problems could be on the horizon as Germany’s newly elected Chancellor has (from day one) criticized President Trump’s policies. The US is considering relocating 25,000 troops and moving back to the US or moving them to Hungary. Germany’s lawmakers have voted for a historic $500 billion budget to be spent on new military & infrastructure projects. |
| 5 |  JAPAN |
4.2 | 1.5% | 9% - 11% | 2.8% & 2.8% | The prospects of another endless war in the Middle East is a serious problem, that will most likely impact future construction activity, result in supply chain issues & EPC costs. Still slow going in Japan, similar to the last 7 – 8 years, Japan’s construction sector similar to the overall economy is basically underperforming. |
| 6 |  UK |
3.6 | 1.4% | 9% - 11% | 3.7% & 4.8% | The recent Israel vs. Iran conflict & the US involvement casts a dark shadow on future construction growth prospects in the UK. The UK construction industry is contending with a major slowdown, with many capital projects delayed or worse cancelled. Some industry experts believe that 2025 construction expenditures will fall by 5% to 15% from 2024 levels. Immigration is a hot potato; Ukraine & dealing with President Trump are some of the challenges. |
| 7 |  FRANCE |
3.3 | 0.9% | 9% - 11% | 2.9% & 6.7% | The ongoing Middle East conflict & the US involvement could negatively impact future economic / construction growth prospects in the next 3 to 6 months. Still slow going in France, similar to the last 7 + years Immigration is a big issue; Ukraine V Russia & dealing with President Trump are some of the issues to deal with in 2025. |
| 8 |  ITALY |
2.4 | 0.8% | 9% - 12% | 1.8% & 6.1% | The recent Israel vs. Iran conflict & the US involvement could impact future economic / construction growth prospects. New Prime Minister / leadership could stir the pot & improve the economy & construction sector. |
| 9 |  BRAZIL |
2.3 | 3.1% | 9% - 12% | 5.7% & 6.8% | The ongoing Israel vs. Iran conflict & the US involvement casts a dark shadow on future construction growth prospects. The country exports three times more to China than to the US, insulating it from potential tariff threats under a returning Donald Trump. |
| 10 |  CANADA |
2.3 | 1.8% | 9% - 11% | 1.8% & 7.1% | The recent Middle East conflict & the US involvement could negatively impact future construction growth prospects. Canada is a significant exporter of construction products to the USA; future tariffs & trade disputes could stymie future construction / economic growth in 2025. dealing with President Trump is a major issue for the new Prime Minister. |
| 11 |  RUSSIA |
2.2 | 1.5% | 11% - 14% | 9.9% & 2.5% | The recent Israel vs. Iran conflict & the US participation could styme future construction growth prospects. US & Russia discuss Ukraine peace proposals / cease-fire in Saudi Arabia; these talks could see the start of the end of this 3+ year conflict will see a big improvement in the Russian economy. |
| 12 |  MEXIC0 |
2.1 | 0.9% | 10% - 13% | 3.8% & 2.7% | The ongoing Israel vs. Iran war & the US involvement could impact future economic & construction growth prospects. Mexico is a major supplier of construction material to the US. Possible US tariffs, drug cartels, border issues & dealing with President Trump are the 2025 challenges facing Mexican economy & construction sector. |
3rd Q 2025 Prices at a Glance:
- Forecast Cost of a barrel of Crude Oil $67 – $78
- Forecast of Euro / US $ Exchange Rate 0.87 – 0.92
- Forecast of UK Pound / US $ Exchange Rate $1.28 – $1.38
- Forecast of Copper per pound $4.25 – $4.45
- Forecast of Gold per Ounce $3.300 – $3,800
- US Construction Material Inflation (Basket of 10 construction materials) 2.2% – 2.8% – Average 2.5%
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