North America Construction Market Size
| Study Period | 2019-2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 2.46 Trillion |
| Market Size (2029) | USD 3.11 Trillion |
| CAGR (2024 - 2029) | 4.82 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
North America Construction Market Analysis
The North America Construction Market size is estimated at USD 2.46 trillion in 2024, and is expected to reach USD 3.11 trillion by 2029, growing at a CAGR of 4.82% during the forecast period (2024-2029).
- The COVID-19 pandemic enormously impacted the construction industry in North America. The building sector in the United States is heavily reliant on supplies of steel, copper, aluminum, stone, and fixtures from other countries, many of which come from China. Non-residential construction started declining by 24% in 2020 due to the pandemic.
- Industrial real estate has shown its strength, especially since the outbreak of the COVID-19 pandemic. This rapidly accelerated the growth of e-commerce and drove the demand for distribution space to new heights. As reported in June 2021, the US needed to add 330 million sq. ft of warehouse space dedicated to online fulfillment by 2025 to keep pace with the expected uptick in e-commerce sales over the same period. In Canada, demand for warehouse space far outnumbers supply, resulting in a spike in industrial construction. Following a 32% rise in online sales in 2020, Canada was expected to require an extra 40 million sq. ft of warehouse space over the next five years to meet demand by 2025. That is more than three times the combined storage capacity available in Canada's three busiest industrial cities: Toronto, Vancouver, and Montreal.
- Manufacturing, mining, and a range of services all include construction as one of their biggest customers. This encompasses all private and government real estate and commercial infrastructure developments in the United States, a primary workforce generator. While the larger construction sector in the United States is projected to remain under macroeconomic pressure, increased government expenditure on infrastructure projects will likely continue to benefit the industry in the near to medium term. The Federal Highway Administration (FHWA) announced an expenditure of USD 2.1 billion in bridge infrastructure upgrades in January 2023. The USD 2.1 billion initiative is part of the national government's substantial committed investment for repairing highway bridges across the country.
- In keeping with its election promises, the Canadian government is likely to increase spending on housing and renewable energy initiatives. The party claimed in its election program that it would spend CAD 2.7 billion (USD 2.1 billion) over the next four years to build or repair 1.4 million affordable housing units and that greenhouse gas emissions would be reduced by 40-45% below 2005 levels by the end of the decade.
North America Construction Market Trends
Residential construction segment holds the major share in the market
- Residential construction, already reeling from rising mortgage rates, will continue to contract and will be joined by nonresidential construction as the commercial sector retrenches. The funds provided to the construction industry through the Infrastructure Investment and Jobs Act (IIJA), the CHIPS and Science Act, and the Inflation Reduction Act (IRA) will counter the downturn, allowing the construction [industry] to tread water.
- During the Great Recession, there was no place to find solace in construction activity; 2023 will be quite different. Rising interest rates put the brakes on what was a robust housing market in early 2022. Some growth but much slower.’ If one breaks that out by quarter, it is expected that there will be a small negative in the first half of 2023 but pick up growth in the second half of 2023.
- Wages should continue to rise in 2023-2024, with a labor market remaining tight (the economy showed full employment in 2022). That is a reason the Fed stands a chance in terms of navigating this narrow path of slowing without a recession.
- The US housing market has borne the brunt of the interest rate hikes amid efforts by the Federal Reserve (Fed) to tame inflation. The Fed announced its ninth straight interest rate hike of 25 basis points in March 2023. With this move, it increased the federal funds rate from nearly 0% in March 2022 to a range of 4.75-5%. The Fed is likely to hike rates further by 25 basis points in early May 2023, as the job market continues to remain tight and inflation is still at higher levels despite easing in recent months.
- Considering the surge in mortgage rates, high construction costs, supply chain disruptions, labor shortages, and fall in permits for new privately owned housing units, market experts expect the US residential construction sector to remain weak in 2023. Reflecting the current weakness in the housing sector, housing construction starts fell sharply in the first three months of 2023.
- According to the US Census Bureau, the total number of new privately owned housing units on which construction started in the country (measured in unadjusted terms) plummeted by 17.9% YoY in the first quarter (Q1) of this year, falling from 389,700 units in Q1 2022 to 319,800 units in Q1 2023. This weakness is attributed to a fall in construction starts of one-unit houses (-28.6% YoY) and two-to-four-unit houses (-31.8%); in contrast, housing construction started on houses with five-or-more units rose by 6.4% YoY in Q1 2023.
United States holds the future market growth in the coming year
- US construction output is forecast to contract by 5% in 2023, mainly due to a slump in residential construction. Rising interest rates lead to higher costs of project financing, while inflation has increased construction material costs. Supply of skilled workers and supply chain disruptions have led to longer lead times with project delays. The lack of skilled labor and an aging workforce could curtail potential construction output in the future.
- It is expected that the residential building segment to see the largest contraction because aggressive monetary tightening is feeding into higher mortgage rates, and high inflation weighs on the affordability of homeownership. However, non-residential construction remains more resilient due to government stimulus. The Infrastructure Investment and Jobs Act will provide a stimulus for construction this year, aiming at comprehensive investments in aging infrastructure (including roads, highways, bridges, rail, and broadband development).
- Construction activities in the US residential sector started on a weaker note in 2023, with the total value of construction put in place (measured in seasonally adjusted nominal terms) falling by 4.1% year-on-year (Y-o-Y) in the first two months of 2023. Due to the economic slowdown, subdued demand in residential construction, and rising pressure on margins, it is expected that both payment delays and insolvencies will increase in 2023. With high-interest rates and a slowdown in activity, businesses with limited liquidity and/or elevated debt levels will face difficulties in servicing their obligations.
- Given the more subdued credit management situation and business performance of the construction industry, the sector outlook has been downgraded from “Good” to “Fair.”Privately‐owned housing units authorized by building permits in April 2023 were at a seasonally adjusted annual rate of 1,416,000. This is 1.5 percent below the revised March rate of 1,437,000 and 21.1 percent below the April 2022 rate of 1,795,000.
- Single‐family authorizations in April were at a rate of 855,000; this is 3.1 percent above the revised March figure of 829,000. Authorizations of units in buildings with five units or more were at a rate of 502,000 in April 2023. Privately‐owned housing starts in April were at a seasonally adjusted annual rate of 1,401,000. This is 2.2 percent (±11.9 percent)* above the revised March estimate of 1,371,000 but is 22.3 percent (±8.7 percent) below the April 2022 rate of 1,803,000.
- Single‐family housing starts in April 2023 were at a rate of 846,000; this is 1.6% (±12.3%) above the revised March 2023 figure of 833,000. The April rate for units in buildings with five units or more was 542,000. Privately‐owned housing completions in April were at a seasonally adjusted annual rate of 1,375,000. This is 10.4% (±9.9%) below the revised March estimate of 1,534,000 but is 1.0% (±16.4%) above the April 2022 rate of 1,361,000. Single‐family housing completions in April were at a rate of 971,000; this is 6.5% (±11.0%) below the revised March rate of 1,039,000. The April rate for units in buildings with five units or more was 400,000.
North America Construction Industry Overview
The North American construction market is less competitive, with major international players occupying a significant market share and leaving less scope for other small and medium-scale players. The North American construction market presents opportunities for growth during the forecast period, which is expected to drive market competition further. The growing infrastructure and construction investments in the region's large economies create ample opportunities for the other players. With a few players holding a significant share, the North American construction market has a detectable level of consolidation.
North America Construction Market Leaders
Lennar Corporation
D. R. Horton Inc.
Kiewit Corporation
Hochteif USA Inc.
Hensel Phelps Construction Co.
*Disclaimer: Major Players sorted in no particular order
North America Construction Market News
- May 2023: Greystar Real Estate Partners LLC (“Greystar”) announced the launch of a new dedicated brand. It will exclusively focus on Greystar’s impact housing product, delivering more attainable housing opportunities for key populations affected by the lack of rental options in the United States.
- April 2023: Greystar Real Estate Partners, LLC (“Greystar”), announced the opening of its flagship manufacturing facility for its modular construction business, Modern Living Solutions (“MLS”), which focuses on attainable and sustainable housing. The milestone was met with a ribbon-cutting ceremony at the western Pennsylvania site where MLS is in the process of hiring 170 full-time employees to execute the ramp-up and operations of its first modular factory.
North America Construction Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Current Economic and Construction Market Scenario
4.2 Technological Innovations in the Construction Sector
4.3 Impact of Government Regulations and Initiatives on the Industry
4.4 Review and Commentary on the Impact of Heavy Equipment Prices on the Construction Industry
4.5 Comparison of the Key Industry Metrics of North American Countries (Analyst View)
4.6 Comparison of Construction Cost Metrics of North American Countries (Analyst View)
4.7 Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Population Growth and Disposable Income
5.1.2 Demand from Office Sector Returning Post Covd-19
5.1.3 Non-Residential Construction on Upward Trend
5.2 Market Restraints
5.2.1 Interests and Financing
5.2.2 Increase in Cost of Raw Materials
5.3 Market Opportunities
5.3.1 Green Building Initiatives
5.3.2 Technology Advancements
5.4 Industry Attractiveness- Porter's Five Forces Analysis
5.4.1 Bargaining Power of Suppliers
5.4.2 Bargaining Power of Buyers/Consumers
5.4.3 Threat of New Entrants
5.4.4 Threat of Substitute Products
5.4.5 Intensity of Competitive Rivalry
6. MARKET SEGMENTATION
6.1 By Country
6.1.1 Canada
6.1.2 United States
6.2 By Sector
6.2.1 Commercial Construction
6.2.2 Residential Construction
6.2.3 Industrial Construction
6.2.4 Infrastructure (Transportation) Construction
6.2.5 Energy and Utilities Construction
6.3 By Construction Type
6.3.1 Additions
6.3.2 Demolition and New Constructions
7. COMPETITIVE LANDSCAPE
7.1 Market Concentration Overview
7.2 Company Profiles
7.2.1 Lennar Corporation
7.2.2 D. R. Horton Inc.
7.2.3 Kiewit Corporation
7.2.4 Hochteif USA Inc.
7.2.5 Hensel Phelps Construction Co.
7.2.6 Tutor Perini Corporation
7.2.7 PulteGroup Inc.
7.2.8 The Whiting-Turner Contracting Company
7.2.9 Toll Brothers Inc.
7.2.10 NVR Inc.
7.2.11 Graham Income Trust
7.2.12 PCL Construction Group Inc.
7.2.13 SNC-Lavalin Construction Inc.
7.2.14 Aecon Group Inc.
7.2.15 Kajima U.S.A. Inc.*
- *List Not Exhaustive
8. FUTURE OF THE MARKET
9. APPENDIX
North America Construction Industry Segmentation
Construction is the installation, maintenance, and repair of buildings and other stationary structures and the construction of roadways and service facilities that form fundamental components of structures and are required for their operation. Construction encompasses the processes involved in constructing buildings, infrastructure, industrial facilities, and related operations from start to finish.
The North American construction market is segmented by Country (Canada and the United States), by sector (commercial construction, residential construction, industrial construction, infrastructure (transportation) construction, and energy and utilities construction), and by construction type (additions and demolition and new construction).
The report offers market size and forecasts for the North American construction market in value (USD) for all the above segments.
| By Country | |
| Canada | |
| United States |
| By Sector | |
| Commercial Construction | |
| Residential Construction | |
| Industrial Construction | |
| Infrastructure (Transportation) Construction | |
| Energy and Utilities Construction |
| By Construction Type | |
| Additions | |
| Demolition and New Constructions |
North America Construction Market Research FAQs
How big is the North America Construction Market?
The North America Construction Market size is expected to reach USD 2.46 trillion in 2024 and grow at a CAGR of 4.82% to reach USD 3.11 trillion by 2029.
What is the current North America Construction Market size?
In 2024, the North America Construction Market size is expected to reach USD 2.46 trillion.
Who are the key players in North America Construction Market?
Lennar Corporation, D. R. Horton Inc., Kiewit Corporation, Hochteif USA Inc. and Hensel Phelps Construction Co. are the major companies operating in the North America Construction Market.
What years does this North America Construction Market cover, and what was the market size in 2023?
In 2023, the North America Construction Market size was estimated at USD 2.34 trillion. The report covers the North America Construction Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the North America Construction Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
North America Construction Industry Report
Statistics for the 2024 North America Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. North America Construction analysis includes a market forecast outlook to for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
