Interest rate cuts have been slowed down in recent months, and as the Trump Administration and Wooden Administration Rates are implemented, the construction industry faces uncertainty related to the progress of future projects.
“The construction begins in January, despite the first round of federal reserve cuts in September and November,” says Sarah Martin, associate director of the Dodge Construction Network forecast. “Inflation has also been more secure than … that was expected, which will make federal leaders more cautious in reducing interest rates by 2025.” He adds: “All the say, the projects will continue to move through the planning to the rhythm of a snail, possibly undermining the trajectory of the non -residential building.”
Martin says that the 25% recently imposed rates on all foreign steel and aluminum will also take into account developers’ decisions to move forward, adding that “they could promote the prices of the already high materials, altering the delicate balance of GO/not projects decision -making, while stricter applications to immigration could make the highest construction scarcity”.
According to Dodge data, the residential sector in general fell by 2% year -on -year in January. The single -family beginnings increased by 6%, while those of multi -family homes fell by 15% compared to the same time last year.
But Martin says that residential planning work has gained steam, “maybe indicating a recovery by the end of 2025”. The largest multi -family projects that began last month were the building of the Tower Ulana Ward Village of $ 470 million in Honolulu and the Jem residences of $ 400 million in the Miami World Center of Miami.
The initial non -residential sector decreased by 22% during the year. Even the data center, which has been promoting the sector, fell to “more typical levels historically” in January, making the global office starting 21% during the year. The hotel’s beginnings fell 21% since January 2024, while manufacturing decreased by 77%, “suppressed by the slowest demand and labor shortage.” The largest non -residential building project to start working in January was the Pediatric Child Health Campus of $ 5 billion and the University of Texas in Dallas.
The non -construction of the non -construction is still strong, 17% year -on -year. Martin points to the usefulness and construction of the road and the bridge as a catalyst for the increase, while environmental public works have remained mainly flat. The largest non -construction project that started in January was the drought solar farm of $ 1.1 million in Callahan County, Texas.
From now on, these conditions are expected to persist, says Martin. “Although the tail of projects that accumulate in the planning is large, developers seem to be worried about the form in [them] forward. “”
Steel increasing
Steel and aluminum rates “tighten the market,” says John Anton, Price and Purchasing Director of S&P Global Market Intelligence, which will increase prices before they settle at a modestly higher pace. “If there is a shortage of supply, it should be very temporary,” he says.
Although only a quarter of the steel used in the construction of the United States is limited, price hikes should be set below 25% in general, according to Anton, due to the large amount of domestic steel already produced. But there are some superiors, he says. Unlike when similar rates were implemented in 2018 in the first term of Trump, no exceptions were made this time for steel that is not generally produced in the United States, such as Super 13 Chromic Steel used in the energy sector. The prices of these products will probably increase by 25%. “It is a tax and it is a tax that will be used to increase revenue, as well as to protect the steel industry,” says Anton.
The plot prices are “very uncertain right now,” adds Luke Lillehaugen, a senior economist at S&P Global Market Intelligence, due to 25% of fare in Canada and Mexico scheduled for early March.
“This means that ultimately, American importers would pay for almost 40% higher prices to wood imported from Canada because 25% would be added above existing antidumping tasks,” said about 15%. “Although the exact magnitude of tariff prices is impossible to predict, the highest prices on Canadian wood [which account for about 20% of the total American supply] It will promote prices in the significantly higher US and will be especially shocking for the northern states than Border Canada. “”
