North American Construction Market Forecasts Steady Growth Through 2028 Despite Power and Workforce Constraints, Says Linesight
NEW YORK--(BUSINESS WIRE)--Global construction consultant Linesight has released its latest Construction Market Insights report, revealing that the North American construction industry continues to gain momentum, fueled by mission-critical sectors, despite the uncertainty surrounding US tariffs and global trade.
Despite global trade uncertainty and the ongoing impacts of US tariffs, the industry is anticipating steady growth. In 2024, the US construction industry grew by 4.5%, exceeding the initial projection of 2.5%, driven by investments in semiconductors, clean energy, infrastructure, and advanced manufacturing. While growth is expected to be moderate over the next several years, demand from AI-driven data centers and high-tech industrial manufacturing will continue to support expansion.
Following a 1.8% contraction in 2024 due to residential slowdowns and high financing costs, Canada's construction industry is poised for recovery. From 2025 to 2028, it anticipates a healthy 2.8% annual growth, fueled by significant investments in transportation, renewable energy, and essential water infrastructure projects. While 2025 sees a modest GDP growth revision to 1.4%, influenced by US tariffs, a broader economic rebound is expected by mid-2026.
'The next phase of growth for North American construction will be shaped by how well the industry addresses persistent infrastructure and supply chain vulnerabilities,' commented Patrick Ryan, Executive Vice President for the Americas at Linesight. 'Tariffs are causing volatility in the supply chain, which is impacting procurement strategies, worsening lead times and increasing cost pressures. Clients should prioritize risk management, localize supply chains where possible, and explore tariff-exempt sourcing alternatives to build greater resilience into their projects.'
Power infrastructure now a top priority
Linesight's latest report underscores the growing urgency of addressing power infrastructure issues, as mission-critical sectors such as data centers, electric transport, and advanced manufacturing drive unprecedented demand for reliable electricity. The US Energy Information Administration (EIA) projects electricity demand to rise by 35–50% between 2024 and 2040, placing increasing strain on North America's aging grid systems.
Utility companies are responding, with capital expenditures across 47 major US energy utilities companies projected to surpass US$212 billion in 2025, a 22% increase over 2024, according to S&P Global. To mitigate energy supply constraints, high-reliability sectors are turning to solutions such as Battery Energy Storage Systems (BESS), Small Modular Fuel Reactors (SMRs), and hydrogen-powered systems to improve operational efficiency and reduce emissions.
Labor shortages and supply chain volatility persist
The report highlights that while supply chains for long-lead equipment (LLE) across North America began stabilizing in late 2024, volatility remains a concern heading into 2025, particularly for large electrical equipment such as transformers, where lead times will likely increase in the near term. North American labor shortages continue to challenge project delivery, with high-demand markets like Ohio, Utah, and Louisiana struggling to secure qualified contractors and skilled tradespeople.
Sector snapshots
Data Centers: The US is on track to become the fastest-growing global data center market, with capacity expected to increase from 25 GW in 2024 to over 80 GW by 2030. Demand from AI workloads is reshaping procurement strategies and accelerating investment in power and cooling solutions. Leading the Canadian market, Ontario and Alberta have become key hubs for data center growth.
Life Sciences: The US dominates the global life sciences sector, holding nearly 70% of 2024's total venture capital deal value. This leadership is driven by evolving investment, focusing on larger, strategic deals and established players in oncology, cardiology, immunology, and neuroscience. While lab construction will slow, manufacturing activity is rising, with higher investment in advanced facilities and continuous manufacturing systems. In contrast, the Canadian life sciences sector has seen a notable decline since 2023, largely due to funding pressures.
High-tech Industrial: Semiconductor and battery manufacturing are fueling North American high-tech industrial construction growth, spurred by the CHIPS and Science Act and the Inflation Reduction Act (IRA). The US Semiconductor Industry Association (SIA) projects a 203% growth in US chip manufacturing capacity by 2032, the largest increase globally. Battery manufacturing, now 69% of all new US clean tech manufacturing projects, has surged despite some recent project delays. However, uncertainty surrounding future incentive guidelines poses a risk to continued expansion. In Canada, federal funding has supported the battery sector, but some projects face delays as EV demand dips.
Commercial: The US commercial sector has experienced moderate but stable growth. Investments in green and high-quality office retrofits are rising, driven by stricter energy efficiency mandates taking effect in many US and Canadian cities, prompting landlords to upgrade buildings. While new office developments have slowed, sustainability, tech advancements, and financing adaptations will shape the sector. Project costs face impact from skilled labor shortages and steel and aluminum tariffs.
Read the full Constructions Market Insights Americas report now.
Linesight is a multinational consultancy firm with over 50 years' experience, providing cost, schedule, program, and project management services to multiple sectors including Life Sciences, Commercial, Data Centers, High-Tech Industrial, Residential, Hospitality, Healthcare, and Retail. Linesight's specialist project teams, each with specific skills and experience, provide faster project delivery, greater cost efficiency, and maximum value for money for their clients. For further information, please visit https://www.linesight.com.
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