Construction Sectors Facing Challenges Under Trump’s Second Term

As the Trump administration sets its sights on reshaping federal policy, the construction industry is bracing for potential shifts in demand across various sectors. While some areas, such as infrastructure and data centers, may experience a surge, others—including renewable energy, high-speed rail, and water projects—face uncertainty or decline.
With adjustments to infrastructure priorities, regulatory changes, and broader economic fluctuations, contractors and developers are navigating a complex landscape. Some industries are poised for growth, while others may struggle to maintain momentum.
Below, we examine the construction sectors likely to see reduced support under Trump’s policies.
Wind and Solar Energy
Trump’s "Unleashing American Energy" initiative focuses on accelerating energy projects but notably does not include the expanding solar and wind industries, which, according to the Energy Information Administration (EIA), make up approximately 14% of the U.S. power supply.
Trump has consistently opposed wind energy, despite its prominence in Republican-led states. In line with this stance, he signed an executive order suspending new or renewed leases for offshore and onshore wind projects, as well as halting wind power development on the outer continental shelf, pending a federal review.
A key question is whether already-approved wind projects will be affected. For instance, the 100,000-acre Lava Ridge Wind project in Idaho has been stalled, according to the Idaho Capital Sun. The administration has also tasked former North Dakota governor Doug Burgum, the Secretary of the Interior, with reassessing federal wind leasing and permitting policies. Notably, in 2023, wind energy accounted for 36% of North Dakota’s power generation, per the EIA.
Despite these policy shifts, major renewable energy players remain largely unphased, as reported by CNBC.
The future of solar energy is equally uncertain, with new projects potentially facing tariffs on Chinese imports, a key source of solar components, per Politico. However, if Trump loosens environmental regulations to speed up permitting, clean energy projects could still find avenues for development.
"In discussions with construction clients and industry leaders, there is a general consensus that both 'traditional' energy sources and 'greener' energy have roles in play in the broader energy landscape," said Kassalen.
High-Speed Rail and Public Transit
Passenger and high-speed rail projects, heavily supported under the Biden administration, may struggle under Trump’s leadership. Federal funding for public transit systems could be reduced, making expansions and improvements more difficult.
Funding from the Infrastructure Investment and Jobs Act (IIJA) may be particularly vulnerable, according to experts at Holland & Knight. They warn that "the administration and congressional Republicans may attempt to offset annual passenger rail funding using advanced appropriations provided by the IIJA, which included $66 billion in advanced appropriations for rail projects."
Electric Vehicles and Battery Plants
Despite bringing Tesla CEO Elon Musk onto his advisory team, Trump remains critical of electric vehicles (EVs). His Day 1 energy order mandates agencies to eliminate the "electric vehicle (EV) mandate," targeting $7.5 billion in IIJA funds designated for EV charging stations under the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program.
Although Trump has attempted to freeze these funds, legal experts suggest he may lack the authority to do so under the Impoundment Act, which prevents presidents from blocking congressionally approved spending, per CNN. Nevertheless, he has already rescinded Biden’s executive order setting a goal for half of new vehicle sales to be electric by 2030.
Despite these obstacles, U.S. automakers remain committed to EV production and factory investments, making a full-scale pullback unlikely. Before leaving office, Biden also secured an additional $635 million for EV infrastructure on January 10, following a $521 million investment in August 2024.
Water Infrastructure
Water infrastructure remains a crucial issue as urban expansion and large-scale developments, such as data centers, place increasing demands on water resources. While Trump has shown support for data centers, he has not addressed their significant water consumption.
If past actions are an indicator, Trump may move to roll back the Clean Water Act, shifting regulatory authority over smaller waterways to states, as reported by The New York Times. However, his administration has historically allocated funds to rural water and wastewater projects.
Trump’s first-term Environmental Protection Agency (EPA) examined the regulation of per- and polyfluoroalkyl substances (PFAS) in drinking water. Although his administration generally supported regulation, his recent "Regulatory Freeze Pending Review" order has halted any new rules, including those proposed under Biden to limit PFAS discharge, per WaterWorld.
For now, IIJA-funded water projects may face funding delays. However, the Association of Metropolitan Water Agencies stated in a January 27 briefing that "EPA seemingly retains the power to move ahead with disbursement of the IIJA-appropriated SRF dollars unfettered."
As the construction industry adapts to these changes, firms must remain flexible in response to shifting federal priorities. While some sectors stand to benefit, others must navigate an uncertain future.
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