What is the projected construction spending in New Jersey for 2025?

The projected construction spending in New Jersey for 2025 is expected to exceed $16 billion.

What factors are driving growth in the New Jersey construction industry?

Factors include a forecasted 17% rise in local spending, a 0.25% cut in interest rates by the Federal Reserve, and a 2.9% inflation rate.

What challenges does the construction industry face?

The industry is grappling with labor shortages, wage inflation, and the impact of tariffs that increase costs.

What is the expected future pipeline for construction projects?

The expected future pipeline for construction projects in New Jersey amounts to around $140 billion over the next five years.

September 29, 2025

New Jersey’s Construction Sector Anticipates Substantial Growth

New Jersey, September 29, 2025

News Summary

The construction sector in New Jersey is projected to grow significantly, with local spending expected to rise by 17% and exceed $16 billion. This positive outlook comes despite a national decline in construction spending. Factors such as a recent interest rate cut by the Federal Reserve and improved inflation rates are expected to stimulate economic activity and job creation in the area. While the civil construction sector shows strong beginnings, challenges remain due to labor shortages and wage inflation.

Long Branch

The construction sector in New Jersey is poised for significant growth, with a projected increase in spending and project initiation throughout 2025, according to recent reports from the Associated Construction Contractors of New Jersey (ACCNJ). The forecasts indicate that local construction spending will rise by 17% above 2024 levels, ultimately exceeding $16 billion.

During the ACCNJ’s Fall 2025 Convention, which hosted over 200 attendees at the Ocean Place Resort & Spa in Long Branch, economic expert Jeffrey Otteau unveiled a promising outlook for the state’s construction industry. He emphasized that despite a 3% decline in national construction spending, New Jersey remains an exception, thriving with robust project activity.

Contributing to this optimism, the Federal Reserve announced a quarter percentage point cut in interest rates on September 17, 2025. Lower interest rates tend to stimulate economic activity, and this adjustment is expected to boost construction endeavors and job creation in the area.

Construction Spending Trends

The civil construction sector has displayed remarkable resilience, with a 145% increase in project starts and an 88% rise in spending over the current year. Spending in civil construction was recorded at $1.40 billion in 2023 and is projected to reach $2.34 billion in 2025. Similarly, the multifamily housing sector showed an 8% increase in spending alongside a 20% rise in construction starts, indicating strong demand for apartment projects.

However, the industrial construction sector has encountered challenges, witnessing a substantial 73% decline in project starts this year. This downturn is viewed as a correction following excessive growth in prior periods. Despite these fluctuations, the pipeline of future construction projects in New Jersey remains promising, estimated at approximately $140 billion over the next five years.

Impact of Economic Factors

In conjunction with declining interest rates, reduced inflation rates, now at 2.9%, may alleviate some pressures on construction costs. This environment offers favorable conditions for new projects, as stability in commodity prices, such as Brent crude oil, which dropped from $82 per barrel in 2023 to $68 in 2025, could further contribute to lower construction costs.

Despite this optimistic backdrop, the construction industry faces ongoing challenges. Labor supply issues have emerged, with a noticeable gap in the number of young workers entering the field. Wage inflation continues to pose a significant challenge, primarily due to the mismatch between labor demand and supply.

As the construction industry continues to expand, it is expected to generate increased value and create new opportunities in deal flow and repair/improvement programs. Rising commercial property values signal a potential for enhanced economic contributions to local communities through job creation and tax revenue.

Looking Ahead

The construction sector in New Jersey is set to benefit from a variety of factors leading to heightened activity. This growth is significant, not only for the construction industry itself but also for the broader economy, highlighting the sector’s crucial role in supporting job creation and bolstering local economies. Future growth will, however, be tempered by ongoing labor shortages and tariffs that could further add to costs.

Key Statistics

Projected overall construction spending in New Jersey for 2025: $16 billion
Rise in local construction spending from 2024 levels: 17%
Future construction project pipeline in New Jersey: $140 billion
Reduction in interest rates by the Federal Reserve: 0.25%
Inflation rate: 2.9%
Average Brent crude oil price decrease: from $82 to $68

FAQ Section

What is the projected construction spending in New Jersey for 2025?: The projected construction spending in New Jersey for 2025 is expected to exceed $16 billion.
What factors are driving growth in the New Jersey construction industry?: Factors include a forecasted 17% rise in local spending, a 0.25% cut in interest rates by the Federal Reserve, and a 2.9% inflation rate.
What challenges does the construction industry face?: The industry is grappling with labor shortages, wage inflation, and the impact of tariffs that increase costs.
What is the expected future pipeline for construction projects?: The expected future pipeline for construction projects in New Jersey amounts to around $140 billion over the next five years.

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Author: STAFF HERE HOUSTON TX WRITER

HOUSTON STAFF WRITER The HOUSTON STAFF WRITER represents the experienced team at HEREHouston.com, your go-to source for actionable local news and information in Houston, Harris County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Houston Livestock Show and Rodeo, Art Car Parade, and Chevron Houston Marathon. Our coverage extends to key organizations like the Greater Houston Partnership and Houston Area Urban League, plus leading businesses in energy and healthcare that power the local economy such as ExxonMobil, Schlumberger, and Houston Methodist. As part of the broader HERE network, including HEREAustinTX.com, HERECollegeStation.com, HEREDallas.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.

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