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U.S. Construction Costs Remain Elevated as Spending Slows in H2 2025
Construction spending across the U.S. slowed in the second half of 2025; however, costs remain elevated and uneven across regions, according to Turner & Townsend’s H2 2025 US market intelligence report. National bid price escalation is forecast at 4.25% in 2026, well above historical norms.
Although economic growth cooled and private construction pulled back, federally backed infrastructure, data centers and trade‑driven supply chain shifts are keeping bid price escalation above historical norms. That’s especially true in Phoenix, Dallas‑Fort Worth and San Francisco, which rank highest nationally for cost escalation pressure.
That being said, the report finds that public and data center projects are propping up the market. Infrastructure, power and data center projects all continue to grow even as private construction spending has retreated by nearly 3.0% year-over-year.
Among the other sectors that saw Y-O-Y gains in H2 2025 construction spending were office (up 2.4%), transportation (up 5.3%) and amusement parks & recreation (up 6.1%).
- ◦Development
