Contractors are feeling the first signs of a return to the construction market.
The Federal Reserve cut its benchmark interest rate by another 25 basis points on Wednesday. The cut sticks to his rate cut before September.
Developers who have spent much of the year waiting on the sidelines are eager to call project teams back to the table. People want to be ready when funding gets even tighter in early 2026, said Robert Brown, president and CEO of GCM Contracting Solutions, a Fort Myers, Fla.-based general contractor..
“Since the first cut in September, we’ve seen a slow but steady return of confidence,” Brown told Construction Dive. “Some projects that were on the edge have now started to move, especially those with design and financing mostly in place.”
He said more projects today are emphasizing design-build delivery models to reduce uncertainty, although factors such as labor, material prices and general inflation continue to determine feasibility.
In September, contractors called the Fed’s initial cut a psychological boost rather than a market reset. The initial drop created an encouraging environment”projects that were close to being economically viable” said Granger Hassmann, Gulf States regional president at Adolfson & Peterson, a Minneapolis-based general contractor.
After this second round of cuts, Brown said sentiment has strengthened.
“The real catalyst is certainty,” Brown told Construction Dive. “Owners are more confident, but still disciplined. Borrowing costs are only one piece of the puzzle.”
A series of cuts will be needed to significantly boost construction activity, said Scott Lyons, prime commercial market leader for DPR, a Redwood City, Calif.-based general contractor, after the Fed began cutting the rate in September. Brown said the latest move adds to the growing sense that construction loan costs will soften going forward.
“Most of our clients see this as the start of a cycle of sustained relaxation and are preparing accordingly,” Brown said. “No one is calling it a full turnaround yet, but there is cautious optimism.”
