Boom or Bottleneck? DPR Analyzes Crosswinds in Construction Market
Redwood City, CA – The U.S. construction sector stands at a pivotal moment as recent federal policies create both opportunity and uncertainty, according to DPR Construction’s Q3 Market Conditions Report. Favorable tax treatment and workforce training incentives could unleash a wave of new projects, but rising material costs, labor shortages, and macroeconomic risks may just as easily stall progress.
“Things are moving fast and this dynamic environment underscores the importance of agility and foresight,” said Philip Bartkowski, DPR’s national preconstruction leader. “This includes adapting procurement strategies in response to new import duties and ensuring compliance with evolving agency rules. Owners need to simultaneously anticipate potential changes while making real-time decisions in order to secure the best outcomes for their projects.”
At the center of the report is the recently passed “One Big Beautiful Bill Act,” which DPR describes as largely contractor-friendly. However, the report also warns that the act’s benefits will not be evenly distributed across all market segments.
Key Findings from DPR’s Q3 Market Conditions Report
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Tax Incentives
Permanent 100% depreciation for commercial and industrial buildings is expected to accelerate project starts by improving cash flow and speeding up cost recovery. Deductions for certain equipment and loan interest are also likely to drive more development activity.
Workforce Development
The extension of Pell Grants to short-term training programs in July 2026 could expand access to trade careers. While this may help ease labor pressures, the outcome will depend on immigration and broader workforce policies.
Fiscal and Monetary Risks
Expanding the federal deficit raises questions about long-term impacts on interest rates and capital availability, potentially constraining financing for large-scale developments.
Materials and Tariffs
Price pressures remain a significant concern. DPR tracked 26 trades and found that all but three experienced year-to-date material price increases, with structural steel, glazing, and electrical components among the hardest hit.
The combination of powerful incentives and persistent headwinds underscores the complexity of today’s construction market. Industry leaders are being urged to remain nimble, rethink procurement strategies, and closely monitor both domestic policy and global supply chain dynamics.
The report also highlights sector-specific outcomes. While industrial, commercial, and mixed-use projects may see immediate benefits from the depreciation and deduction provisions, public infrastructure and residential markets could continue to feel the squeeze of workforce shortages and financing challenges.
DPR emphasizes that adaptability will be critical. Firms that anticipate changes early, strengthen relationships with trade partners, and leverage workforce training programs may be best positioned to seize opportunities created by federal policy shifts.
For a deeper dive, the full Q3 Market Conditions Report and DPR’s interactive market conditions dashboard provide detailed data and analysis on cost trends, policy implications, and regional impacts.
Originally reported by DPR Construction.