Welcome 2025! There was much that happened in 2024 that shaped the construction industry—and there is much to expect in 2025 as it relates to technology. For today’s blog, let’s dig into some of the biggest trends to watch, and then we will also share some thoughts about how to approach 2025.
Takeaway 1: Overall Market Conditions
The construction market has been a wild ride in the past few years—but as Peggy Smedley always says, one thing we can always come to expect is the construction industry is cyclical in nature. We will always have ups and downs.
The numbers paint an interesting story. We see construction employment increased in the majority (65%) of the metro areas between November 2023 and November 2024. Also, builder confidence was stable as we closed out 2024—and has the potential to be strong in 2025.
The market for newly built single-family homes was 46 in December, which was the same reading as the month prior. Also, we see 31% of builders cut home prices in December, unchanged from November. NAHB (National Assn. of Home Builders) suggests while there are still concerns about high interest rates, high construction costs, and a lack lots, there is also hope there will be future regulatory relief.
NAHB is forecasting additional rate cuts in 2025 from the Federal Reserve, but concerns surrounding inflation will continue in 2025, keeping mortgage rates near current levels.
Takeaway 2: Reskilling the Workforce
Here at Constructech, we have covered the workforce trends for years and last year narrowed in on the worker of tomorrow with an in-depth report and ongoing analysis about the reskilling of the workforce. The bottomline is the way we work—across all industries and especially in construction—is changing. Companies that recognize this trend and are prepared for it will be better equipped in 2025.
What does this mean? Reskilling is simply learning a new skill or set of skills so that a worker can do a new or different job. This often involves teaching and training workers intensively, so they are able to do something new. Meanwhile, upskilling gives employees more advanced skills through education and training.
While reskilling is often disruptions—such as technology and others—that force a change within a company, upskilling is often about the worker and their evolution within the company. To be clear, both likely need to happen for a company to be truly successful.
JLL says change will be a defining theme for 2025—and by 2030, 42% of business leaders will see a blend of in-house and outside experts as the most likely future model of their CRE (construction and real estate) department. Naturally, this will require upskilling and leveraging new, emerging technology.
Takeaway 3: AI Leads the Way
Which brings us to our next point for today’s blog—AI (artificial intelligence) will lead the way. We know generative AI was a key imperative for enterprises in 2024, with 89% of chief experience officers rating gen AI tools as an area of top importance. Also, we see 65% of organizations report their organizations are regularly using gen AI in 2024, which is nearly double the percentage from 2023. Simply, the growth is staggering—and it will continue into 2025 and beyond.
Gen AI can touch many areas of a construction business—from project management, to accounting, to estimating. It can also completely reimagine how we build. Sustainability goals and targets can be supported by AI in the year ahead. Sustainability tracking and optimization can be spurred on by AI.
Next Steps
How should you proceed in the year ahead? Consider these next steps for success for your construction business in 2025.
- Identify market opportunities
- Recognize hurdles
- Consider your workforce
- Identify how tech can help your business
- Only use tech where it makes the most sense
- Involve your team in tech implementation
- Don’t forget about cybersecurity
- Create SMART goals around tech
- Reevaluate your goals regularly
- Adjust as needed
What would you add? What were some of the biggest trends from 2024 that will extend into 2025? How can we best prepare for what comes next?
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