Construction activity across the United States and Canada appears positioned for a meaningful rebound, with substantial investment pipelines forming beneath a year of underwhelming near-term performance. While 2025 delivered weaker-than-expected employment growth and uneven housing activity, underlying drivers suggest both markets are preparing for a period of renewed momentum.
In the United States, rapid technological advancement and federal policy support continue to fuel large-scale investments in semiconductor manufacturing, artificial intelligence-driven data centers, and energy infrastructure. Capital commitments tied to chip fabrication plants, grid upgrades, and next-generation power sources — including growing interest in nuclear energy — indicate that significant construction demand remains delayed rather than cancelled.
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Canada is following a similar trajectory, with federal and provincial governments promoting large “nation-building” initiatives. These include expanded liquefied natural gas export facilities, port modernization projects, and new mines focused on critical minerals essential to the digital economy. At the same time, both countries acknowledge the urgent need to increase housing supply to accommodate population growth, reinforcing long-term prospects for residential construction.
Despite these favorable conditions, construction employment performance in 2025 fell short of expectations. U.S. private-sector employment increased just 0.4% year over year in December, with construction employment rising a modest 0.2%, according to federal labor data. Residential construction jobs edged lower, while gains were limited in nonresidential building, heavy civil engineering, and specialty trades.
Average monthly job creation in the U.S. economy remained well below historical norms, and construction added only a small fraction of new positions. Manufacturing employment declined overall, particularly in durable goods, underscoring broader industrial softness.
Canada outperformed the U.S. in overall employment growth, but its construction sector still experienced a slight contraction. Regional disparities were notable, with British Columbia recording strong gains while other provinces lagged. In both countries, healthcare and social assistance accounted for the majority of job growth, rather than goods-producing sectors.
Wage growth offered a more positive signal. Construction wages in the U.S. rose in line with broader private-sector earnings, while Canada posted slightly lower but still steady increases in hourly and weekly pay.
Housing activity further illustrated the uneven nature of construction conditions. U.S. housing starts fell to their lowest level since the pandemic, remaining well below what analysts consider necessary to meet long-term demand. Elevated interest rates and affordability pressures continue to weigh on new residential development.
Canada’s housing market showed sharper regional contrasts. Major declines in starts were recorded in Toronto and Vancouver, while cities such as Montreal, Calgary, and Edmonton experienced notable increases. Nationally, housing starts remained above long-term historical averages, suggesting underlying resilience despite short-term volatility.
Taken together, the data suggest that both the U.S. and Canadian construction sectors are operating below their potential as major investments await clearer economic and policy conditions. With substantial capital committed to technology manufacturing, energy infrastructure, resource development, and housing, the industry appears primed for acceleration once delayed spending moves forward.
When these projects advance, construction output could rise rapidly, supported by available capacity and sustained demand drivers. The resulting wave of activity would mark a strong upturn for both economies, reinforcing construction’s role as a cornerstone of long-term economic growth in North America.
Originally reported by Alex Carrick in Canada Construct Connect.
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