Construction activity across New Jersey saw strong gains in 2025 and is expected to maintain momentum into 2026, according to a newly released industry report.
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The Associated Construction Contractors of New Jersey, in collaboration with Otteau Valuation Group, published its MarketCAST report for the fourth quarter of 2025, highlighting a 13% increase in statewide construction spending compared to the previous year. In contrast, national construction spending declined slightly by 1% during the same period.
Economists behind the report project an additional 5% increase in construction spending across New Jersey in 2026, reflecting continued investor confidence and a strong pipeline of upcoming projects.
“New Jersey’s construction industry continues to play a critical role in driving economic growth and investment across the State,” said Jack Kocsis Jr.. “The level of planned construction activity reflected in this report demonstrates strong confidence in New Jersey’s future.”
Despite a notable decline in construction employment—down more than 10,000 jobs year-to-date in New Jersey compared to a 1,000-job loss nationally—the state’s long-term outlook remains robust. The report estimates approximately $124.3 billion in future construction spending is currently planned, marking a 29% increase from the $90.6 billion recorded at the end of 2023.
Major developments are expected to play a key role in sustaining this growth. Among them is the highly anticipated Netflix Studios project at Fort Monmouth, a $1 billion development projected to generate more than $8 billion in economic output once completed.
“New Jersey experienced solid growth in the construction sector in 2025, and we see potential for strong future growth here in the State,” said Jeffrey Otteau. “While new project starts slowed modestly, increased construction spending, strong performance in the government and commercial sectors, and stabilized construction inflation are good indicators for continued growth in the year ahead.”
By sector, civil construction led the way in 2025 with $4.8 billion in project starts. Healthcare, education and single-family residential construction followed, each contributing $2.9 billion in activity. Most sectors experienced increased spending compared to 2024, with the government segment showing the largest gains.
Multifamily construction remained relatively flat year-over-year, suggesting a stabilization in that segment after previous cycles of rapid expansion.
While inflation continues to be a concern, cost increases have moderated significantly compared to pandemic-era spikes. Construction costs rose 2.9% in North Jersey and 4.1% in South Jersey—far below the more than 18% increases seen during peak pandemic conditions.
Otteau cautioned that global geopolitical uncertainties could still influence inflation trends in 2026, but emphasized that current indicators point toward a more stable pricing environment.
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The report underscores a broader shift in how construction growth is being driven in New Jersey, with public-sector investment and infrastructure projects increasingly shaping the market. Government-led initiatives, particularly in transportation, utilities and public facilities, are helping offset slower growth in certain private segments such as multifamily housing.
At the same time, the large pipeline of planned developments signals sustained demand for skilled labor, even as the industry grapples with workforce shortages. Contractors and developers may face challenges in staffing projects efficiently, which could impact timelines if labor participation does not rebound.
Additionally, the scale of upcoming investments highlights the importance of long-term planning around supply chains and material availability. While inflation has cooled, fluctuations in global markets could still affect pricing for key construction inputs such as steel, concrete and energy.
Overall, New Jersey’s construction sector appears positioned for steady expansion, supported by strong institutional investment, diversified project activity and improving cost stability—factors that collectively reinforce confidence heading into 2026 and beyond.
Originally reported by ROI-NJ Staff(Edison) in ROJ - NJ.
