The U.S. economy exhibited moderate growth in the fourth quarter of 2024 with a GDP of 2.3%. This performance was primarily fueled by robust consumer spending across both goods and services, alongside a resilient labor market. Inflation continued to show signs of easing, with the core Personal Consumption Expenditures (PCE) measure approaching the target 2% mark, albeit with some fluctuations. This growth outpaced market expectations, demonstrating a healthy economic expansion despite ongoing concerns about potential slowdowns in other sectors.

On the construction front, input price increases were relatively subdued, with the national average rising by just 0.63% from the previous quarter. Most of this increase was driven by labor costs. Material pricing, while showing some volatility, has largely balanced out, with minimal impact on overall costs for the time being. However, concerns about future price instability are becoming more widespread, based on anecdotal evidence. According to our trade sentiment survey, costs remained steady or saw slight increases for most respondents. At the same time, there has been a slowdown in backlog growth for trades across the country, with no noticeable reduction in competition at bid time. This suggests a stable yet competitive business investment environment in the construction sector.

JE Dunn’s economic team is closely monitoring the proposed tariffs announced by the administration and their potential impact on the construction industry. For more information or resources on how these tariffs may affect the industry, please contact your local market leads.