A recent report by Engineering News-Record (ENR) reveals a surge in confidence among construction executives for the year ahead. The ENR’s Construction Industry Confidence Index rose to 61 in Q1 2025, the highest since Q1 2022, indicating a growing market sentiment. This optimism is echoed in the Construction Financial Management Association’s (CFMA) Confindex, which, despite slight declines in some areas, maintains a positive outlook for the coming year.
However, the report also highlights underlying economic uncertainties. While most executives perceive the current economy as stable, concerns about potential declines in the near and long term have increased. This is reflected in the slight dip in the economy confidence rating and the Confindex’s “current conditions” index.
Economist Anirban Basu suggests that the optimism might stem from expectations of a pro-growth economic policy following potential short-term turbulence from tariffs. However, he also points to rising concerns about profit margins and material prices, coupled with potentially prolonged high interest rates, as factors that could dampen the positive outlook.
Regional disparities are also evident, with the Far West/Pacific region reporting the lowest confidence due to the slowdown in the big tech building boom. In contrast, Houston, Texas, is identified as a market poised for growth due to its position as a leading energy technology hub.
Overall, the report paints a picture of cautious optimism within the construction industry. While executives are hopeful for a strong year ahead, they are also mindful of potential economic headwinds and regional variations that could impact the market.
Reference
Keller J. (2025) 1Q Cost Report: Construction Execs Optimistic for Year Ahead. ENR. February 26.