US Commercial Construction Market Analysis, Size, and Forecast 2025-2029

US Commercial Construction Market Size 2025-2029

The us commercial construction market size is forecast to increase by USD 191 billion at a CAGR of 2.7% between 2024 and 2029.

• The Commercial Construction Market in the US is experiencing significant growth driven by the increasing trend towards sustainable building design and the emergence of smart cities. Green buildings, which incorporate energy-efficient designs and renewable energy sources, are gaining popularity due to their environmental benefits and cost savings over time. This trend is expected to continue, with the US Green Building Council reporting that nearly half of all new commercial construction projects in the US are now green certified. However, the market is not without challenges. One of the most pressing issues is the lack of skilled labor in the construction industry.
• According to the Associated General Contractors of America, over 80% of contractors report difficulty in filling hourly craft positions. This labor shortage is driving up costs and delaying project timelines, making effective workforce management a critical challenge for construction companies. To capitalize on the growth opportunities in the market, companies must focus on innovative solutions to address the labor shortage, such as training programs and partnerships with vocational schools. Additionally, leveraging technology, such as automation and modular construction, can help improve efficiency and reduce reliance on manual labor. Overall, the Commercial Construction Market in the US presents significant opportunities for companies that can effectively navigate these challenges and stay ahead of the trend towards sustainable and smart building design.

What will be the size of the US Commercial Construction Market during the forecast period?

Request Free Sample

• The commercial construction market in the US is experiencing significant dynamics and trends. Labor force shrinkage and escalating costs are major challenges for office building construction, repair and maintenance, water infrastructure projects, and mixed-use developments. Infrastructure development programs and urban regeneration are driving the need for energy-saving designs, outdoor leisure facilities, and renovation and retrofitting. Product lead times and fluctuating material prices add complexity to retail building projects in the non-residential building market. Labor shortages and rising building material prices are also impacting infrastructure projects and refurbishment and demolition activities.
• These factors necessitate innovative solutions and strategic planning for US businesses in the construction sector. Market research firms like FMI, Grand View Research, and Juniper Research provide valuable insights into these trends and dynamics.

How is this market segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

• Sector
  • Private construction
  • Public construction
• Type
  • Building
  • Others
• End-user
  • Office buildings
  • Retail spaces
  • Hotels and hospitality
  • Healthcare facilities
  • Others
• Geography
  • North America
    • US
  • Europe
  • Middle East and Africa
  • APAC
  • South America
  • Rest of World (ROW)

By Sector Insights

The private construction segment is estimated to witness significant growth during the forecast period.

The commercial construction market in the US encompasses the development of various structures, including restaurants, grocery stores, shopping centers, office facilities, hospitals, and educational institutions. Notable projects, such as the El Paso VA Health Care Center in Fort Bliss, which had its groundbreaking on August 28, 2024, and Skymark Reston Town Center, the tallest residential tower in the Capital Region, which reached its topping out point in October 2023, contribute significantly to this sector's expansion. Infrastructure development programs, such as electric grid reconstruction and water infrastructure projects, are also driving the commercial construction market. For instance, the infrastructure bill, which includes funding for infrastructure projects, is expected to boost the market's growth.

Additionally, the non-residential building market is experiencing a surge due to urban regeneration and renovation and retrofitting initiatives. However, the market faces challenges, including labor shortages, cost escalation, and fluctuating material prices. The construction industry's labor shortage is a significant concern, with an estimated 200,000 unfilled jobs in 2023. Furthermore, infrastructure projects often face delays due to labor shortages and rising material prices. The non-residential segment, including office buildings and retail buildings, is experiencing increased demand due to the shift towards energy-saving designs and the need for better communication linkages and operational efficiency. Infrastructure projects, such as public transportation and road network systems, are also crucial in addressing the labor shortage and improving service delivery in various functional areas.

Moreover, the residential construction sector, including multifamily housing, is experiencing product lead times due to the labor shortage and rising material prices. The market's response to these challenges includes the adoption of technology, such as broadband internet and data and communication systems, to improve operational efficiency and address labor shortages. In conclusion, the commercial construction market in the US is experiencing growth due to infrastructure development programs, urban regeneration, and the demand for energy-efficient designs. However, challenges, including labor shortages, cost escalation, and fluctuating material prices, are hindering growth. The market's response to these challenges includes the adoption of technology and collaboration between industry players to address labor shortages and improve operational efficiency.

Get a glance at the market share of various segments Request Free Sample

The Private construction segment was valued at USD 1313.50 billion in 2019 and showed a gradual increase during the forecast period.

Market Dynamics

Our researchers analyzed the data with 2024 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

What are the key market drivers leading to the rise in adoption of US Commercial Construction Market?

• Increase in construction of green buildings is the key driver of the market.

• The construction industry consumes a significant amount of energy, making it essential to establish energy-efficient buildings. Green buildings, designed to minimize energy consumption, have emerged as a new trend in the industry. With the depletion of natural energy resources and the increasing emissions from buildings, it is crucial to prioritize energy efficiency. Green buildings are ergonomically designed to reduce energy consumption and minimize greenhouse gas emissions, surpassing the transportation sector's output.
• These structures consume energy sustainably, ensuring a continuous supply without exhausting resources at the source. The adoption of green buildings is a vital step towards reducing energy consumption and promoting sustainability in the construction industry.

What are the market trends shaping the US Commercial Construction Market?

• Emergence of smart cities is the upcoming trend in the market.

• The integration of information and communication technologies in city management is giving rise to the concept of smart cities. This trend is leading to advancements in various functional areas, including transportation, traffic management, energy efficiency, and sustainability, and governance. The increasing number of smart city projects in the US will necessitate the construction of sophisticated road network systems. This market dynamic presents significant growth opportunities for companies involved, as they focus on expanding roadways to align with the vision of federal government-led smart city initiatives.

What challenges does US Commercial Construction Market face during the growth?

• Lack of workforce in construction industry is a key challenge affecting the market growth.

• The commercial construction market in the US faces a notable challenge due to the shortage of a skilled workforce. This issue is prevalent across various industries, including construction, where the demand for both skilled and unskilled labor is high. The scarcity is particularly acute in the case of skilled workers, such as technicians, site managers, and plumbers, preventing companies from executing their projects and accepting new orders.
• Consequently, this labor shortage significantly impedes the expansion of the commercial construction market during the forecast period.

Exclusive US Commercial Construction Market Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, market forecast partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• ACS Actividades de Construccion Y Servicios SA
• AECOM
• Bechtel Corp.
• Clark Construction Group LLC
• Clayco
• DPR Construction
• Ferrovial SA
• Fluor Corp.
• Gilbane Inc.
• Hensel Phelps
• HOCHTIEF AG
• Holder Construction Group LLC
• Kiewit Corp.
• Parsons Corp.
• PCL Constructors Inc.
• Skanska AB
• STO Building Group
• The Walsh Group
• Tutor Perini Corp.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Research Analyst Overview

The commercial construction market continues to experience dynamic shifts, driven by various factors that influence production, spending, and the overall industry landscape. One of the most pressing issues is the shrinking labor force, which poses a significant challenge for contractors and developers. This shortage, coupled with increasing construction spending, necessitates innovative solutions to maintain operational efficiency and keep projects on schedule. Outdoor leisure facilities, such as parks and recreational areas, are among the functional areas that have seen growing demand. As consumers prioritize health and wellness, these facilities have become essential components of commercial developments. Building materials play a crucial role in the construction of such projects, with the non-residential segment being a major consumer.

Public safety and service delivery are other critical aspects of commercial construction. Infrastructure development programs, including broadband internet and public transportation, are essential for ensuring optimal service delivery and enhancing the overall quality of life in urban areas. Refurbishment and demolition projects are also prevalent, as older buildings are being replaced or repurposed to accommodate modern functional requirements. Labor shortages have led to cost escalation in the construction industry, making it essential for contractors and developers to focus on repair and maintenance and renovation and retrofitting projects. Building material prices have also been on the rise, necessitating careful planning and cost management.

Energy-saving designs and communication linkages have become increasingly important, as operational efficiency and sustainability become key priorities. Infrastructure projects, including road network systems and electric grid reconstruction, are a significant focus for governments and private entities alike. These projects require extensive planning, coordination, and resources, making them complex undertakings. Water infrastructure is another essential area of investment, as the need for reliable water supply and wastewater management continues to grow. The non-residential building market is witnessing a shift towards mixed-use developments, which offer a more efficient use of space and resources. These projects often involve the integration of various functional areas, such as office buildings, retail spaces, and residential units.

Product lead times have become a concern for contractors and developers, necessitating effective project management and supply chain optimization. The infrastructure bill and its potential impact on the commercial construction market are a topic of ongoing discussion. The bill's passage could lead to increased spending on infrastructure projects, providing a significant boost to the industry. However, the implementation of the bill and its potential impact on labor and material costs remain to be seen. In conclusion, the commercial construction market is experiencing a period of significant change, driven by various factors that influence production, spending, and the overall industry landscape.

The challenges posed by labor shortages, cost escalation, and infrastructure development programs necessitate innovative solutions and effective project management to maintain operational efficiency and keep projects on schedule. The focus on sustainability, operational efficiency, and communication linkages is also driving the adoption of energy-saving designs and the integration of various functional areas in commercial developments.

Request Free Sample

What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2025 and 2029
• Precise estimation of the size of the market and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behaviour
• Growth of the market across US
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

We can help! Our analysts can customize this market research report to meet your requirements Get in touch