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REDWOOD CITY, Calif. – A combination of favorable interest rates and materials prices is providing opportunities for construction project owners, even as labor shortages continue to pose significant challenges, according to DPR Construction’s latest Market Conditions Report. With 77% of contractors reporting greater difficulty filling skilled craft positions compared to last year, the industry faces a critical workforce issue. However, the current economic environment, with lower interest rates and inflation, is opening up more financing options for construction projects.
"Factors like interest rates and inflation will continue to play a significant role in determining financing options for construction projects,” said Matt Murphy, DPR’s core markets leader. “That's why we believe it's crucial to plan ahead for variability, ensuring stakeholders’ budgets are flexible enough to handle any surprises. It’s a good time for owners to consider various financing options, including traditional loans, public funding, or private investments, to secure the best terms for projects.”
DPR’s report highlights significant growth in the Life Sciences sector, with an increased demand for specialized facilities such as research labs, biomanufacturing plants, and innovation hubs. As the sector grows into 2025, the high demand for skilled labor to execute these projects continues to pose challenges, requiring early planning to maintain schedules.
Other key market trends from the report include:
Advanced Technology
The advanced manufacturing sector is expanding, driven by industries like semiconductors, automotive, and energy. The mission-critical sector, including data centers and cloud services, continues to grow in response to rising digital infrastructure needs. DPR leaders note a surge in data center development.
Commercial
With favorable financing conditions, developers are exploring opportunities in sectors such as manufacturing, data centers, and student housing to meet rising demand for vacant spaces.
Healthcare
Lower interest rates are expected to improve access to capital and refinancing options in the healthcare sector by 2025. DPR leaders encourage owners to plan strategically for long-term capital investment to avoid future challenges.
Higher Education
Positive spending projections are fueling investment in student housing, technical research facilities, stadium modernization, and spaces for advancements in personalized learning.
To explore more insights into 2025 market trends and top industry indices, visit DPR’s interactive market conditions dashboard.
For more information, contact pr@dpr.com.