The ConstructConnect Expansion Index rose again in December, delivering its fifth consecutive month of growth and signaling cautiously improving conditions in the U.S. construction pipeline. The index registered 1.08, reflecting 8% growth in ideated construction investment compared to the same month in 2024. While the streak suggests strengthening demand, analysts emphasized that progress remains inconsistent across sectors and geographic regions.
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December’s reading reinforces a pattern that began in late summer, with ideated pre-bid construction activity maintaining upward momentum even as broader macroeconomic indicators show mixed performance. The five-month stretch of expansion points to continued openings for firms positioned to navigate shifting demand, particularly in markets where pipelines are stabilizing.
Of the ten tracked construction verticals, only Industrial, Commercial, and Military recorded expansion through December. Industrial led the month with a strong 1.95 index score, supported by continued investment in manufacturing facilities, logistics hubs, and advanced technologies. Commercial followed at 1.27, reflecting improvements in select retail, office, and mixed-use planning activity, while Military construction held steady at 1.24, buoyed by ongoing federal infrastructure commitments.
The remaining sectors—including Residential, Community, Educational, Government, Medical, Retail, and Civil—fell below 1.0, signaling contraction. Residential and Community dipped below 0.85, indicating steep year-over-year declines in planned investment and underscoring how developers remain cautious amid financing challenges, workforce shortages, and cost volatility. Multiple months of contraction suggest that several verticals may face constrained project pipelines heading into 2026.
Geographically, activity remains uneven.
Sixteen states posted readings above 1.0, an improvement from November’s total of fourteen. Arizona surged to the top of the list with an index of 5.35, driven by large-scale industrial and energy-related planning. Wyoming (3.06) and North Dakota (1.79) rounded out the next-highest performers.
A small group of states also exceeded 1.2, including Alabama (1.29), Georgia (1.30), and Delaware (1.20), highlighting regions where investment dollars continue to flow even if project counts remain relatively small. ConstructConnect emphasized that high readings often reflect the impact of a single megaproject, especially in less populous states.
Meanwhile, 34 states and the District of Columbia saw contraction in ideated spending. The Northeast and Midwest trailed the nation, with average readings of 0.91 and 0.96, respectively—continuing a months-long trend of lagging growth due to slower commercial activity, demographic shifts, and delayed public-sector decision-making.
While the index shows improvement, ConstructConnect analysts stress that opportunities are increasingly concentrated. With only three verticals in expansion and a limited number of states driving the bulk of gains, construction firms may face competition for a smaller universe of viable projects.
The December results underscore the need for contractors, suppliers, and developers to closely track geographic and sector-level indicators. Firms operating in expanding industrial markets or high-performing states may see sustained or growing pipelines, while those in contracting regions must anticipate tighter margins, heightened competition, and potentially longer pursuit cycles.
The ConstructConnect Expansion Index measures the total dollar value of pre-bid, in-planning construction projects in the current month against the same month a year earlier. A value above 1.0 indicates rising market potential, while values below 1.0 reflect stagnation or decline. The index incorporates projects across multi-family residential, nonresidential building, and civil/heavy engineering categories, offering one of the industry’s most comprehensive early indicators of emerging construction trends.
Originally reported by Devin Bell in Construct Connect News.
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