New Jersey, September 29, 2025
News Summary
The construction industry in New Jersey is set for impressive growth, with spending projected to rise by 17% in the upcoming years. Insights from industry experts highlight a flourishing landscape despite national setbacks, driven by favorable economic conditions and increased demand. Key sectors like civil construction are experiencing remarkable gains, while challenges such as labor shortages and rising costs persist. The overall outlook remains positive, promising job creation and economic stimulation throughout the state.
Long Branch, New Jersey – Positive Growth Forecasted for Construction Industry
The construction industry in New Jersey is poised for significant growth in the coming years, according to a forecast presented at the Fall 2025 Convention hosted by the Associated Construction Contractors of New Jersey (ACCNJ). Over 200 industry professionals gathered at the Ocean Place Resort & Spa to hear insights from Jeffrey Otteau, Managing Partner and Chief Economist at Otteau Group, who reported that construction spending in the state is anticipated to increase by 17% over 2024, with total spending expected to surpass $16 billion in 2025.
Despite a national decline of 3% in construction spending, New Jersey’s sector is thriving, attributed to favorable economic conditions, including a recent quarter percentage point interest rate cut by the Federal Reserve. This monetary adjustment is expected to stimulate construction activity and initiation of new projects, solidifying the state’s positive trajectory.
However, challenges persist as construction costs have surged since the pandemic, with increases reported at 34% in North Jersey and 32% in South Jersey. The construction industry also faces labor supply concerns, stemming from an insufficient influx of young workers entering the field and persistent wage inflation driven by demand outpacing supply.
Current Trends in New Jersey’s Construction Sector
Comprehensive data show a robust performance in the civil construction sector, which recorded a remarkable 145% increase in project starts and an 88% increase in spending this year alone. Spending in this area jumped from $1.40 billion in 2023 to $2.34 billion in 2025, showcasing the sector’s resilience.
In contrast, the industrial construction sector experienced a significant downturn, with a 73% drop in project starts, which Otteau described as a market correction following years of excess growth. The multifamily housing segment, however, remains strong with an 8% increase in spending and a 20% rise in project starts, indicating healthy demand for apartment buildings.
Future Projections and Economic Impact
Looking ahead, the future pipeline of construction projects in New Jersey is estimated at around $140 billion over the next five years. This projection suggests a strong foundation for job creation and economic development within local municipalities. The construction industry’s positive influence extends beyond direct job creation; it stimulates numerous local economies through indirect and induced impacts, contributing to tax revenue as property values start to climb again.
As inflation rates have decreased to 2.9%, a possible easing of construction costs is anticipated, enhancing the environment for new projects. Additionally, the average price of Brent crude oil has notably dropped from $82 per barrel in 2023 to $68 in 2025, which could further reduce inflationary pressures and construction expenses moving forward.
Challenges Ahead
Despite this optimistic outlook, the construction industry in New Jersey must navigate challenges such as labor shortages and tariffs that threaten to raise operational costs. Addressing these issues will be vital to maintaining growth momentum and meeting the increasing demand for construction services fueled by a recovering economy.
Summary
New Jersey’s construction industry is on track for robust growth in the next few years, driven by increased spending and project initiations. While challenges like rising construction costs and labor shortages remain, the overall outlook is positive, suggesting significant contributions to the economy in terms of job creation and local development.
FAQs
What is the projected construction spending in New Jersey for 2025?
The aggregate construction spending in New Jersey is projected to exceed $16 billion in 2025.
How much has the civil construction sector grown recently?
The civil construction sector has seen a 145% increase in project starts and an 88% increase in spending this year.
What are the challenges facing New Jersey’s construction industry?
Key challenges include rising construction costs, labor shortages, and tariffs that may increase operational expenses.
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Additional Resources
- NJBIZ: NJ Construction Outlook 2025
- Insider NJ: ACCNJ Report on Construction Industry
- Princeton Perspectives: 2025 New Jersey Economic Outlook
- NJBIZ: NJAA Construction Outlook
- ENR: ENR East 2025 Top Contractors
- Wikipedia: Construction
- Google Search: New Jersey construction industry news
- Google Scholar: New Jersey construction economic outlook
- Encyclopedia Britannica: Construction
- Google News: New Jersey construction 2025
Author: STAFF HERE PHILADELPHIA WRITER
PHILADELPHIA STAFF WRITER The PHILADELPHIA STAFF WRITER represents the experienced team at HEREPhiladelphia.com, your go-to source for actionable local news and information in Philadelphia, Philadelphia 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 Mummers Parade, Philadelphia Flower Show, and Thanksgiving Day Parade. Our coverage extends to key organizations like the Greater Philadelphia Chamber of Commerce and United Way of Greater Philadelphia, plus leading businesses in telecommunications, food services, and healthcare that power the local economy such as Comcast, Aramark, and Children's Hospital of Philadelphia. As part of the broader HERE network, we provide comprehensive, credible insights into Pennsylvania's dynamic landscape.
