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Growth Opportunities in North Carolina’s Construction Industry

A vibrant construction scene in North Carolina, illustrating the ongoing growth in residential and commercial projects.

North Carolina, August 1, 2025

News Summary

North Carolina’s construction industry is experiencing growth, emerging as the fifth strongest in the country. Residential construction is expected to rise significantly, supported by increased employment and wages. However, challenges like rising material costs and competition could impact overall spending. Data centers are also a highlight, with a notable increase in constructions. Key metropolitan areas poised for growth include Raleigh, Charlotte, and Greensboro, while strategies for diversification and adaptability remain crucial for companies in this evolving sector.

Raleigh, North Carolina

North Carolina’s construction industry is showing promising growth even amid competitive market conditions, establishing itself as the fifth strongest construction sector in the nation, according to a recent study utilizing data from the U.S. Bureau of Labor Statistics and Census Bureau. The forecast indicates that spending in residential construction will significantly increase over the coming years, bolstered by a 13% rise in construction employment and an 11.4% change in construction wages between 2021 and 2024.

However, challenges loom on the horizon for the broader construction landscape. Economic forecasts suggest that national construction spending may flatten or even contract in the near term, driven by rising material costs and increasing labor expenses. This situation is expected to diminish the dollar’s value in construction expenditures, compelling companies to explore strategic growth options to sustain their operations.

Yields from Diverse Sectors

While residential construction is on an upward trajectory, other sectors such as commercial, industrial, civil, and institutional are predicted to witness flat or modest growth over the next five years. In contrast, spending in data centers is projected to grow by 5% annually over the same period, marking a significant trend as North Carolina has seen a remarkable 15-fold increase in data center constructions in the last decade. Moreover, sectors like lodging, power, transportation, and education are also expected to increase spending, providing additional opportunities for construction professionals.

Identifying Growth Opportunities

An analysis highlights that the top five metropolitan areas poised for growth include Raleigh/Durham/Chapel Hill, Charlotte, Greensboro, Wilmington, and New Bern. On the opposing end, regions projected for slow growth include Winston-Salem, Hickory/Lenoir/Morganton, Burlington, and Fayetteville. To tap into these opportunities, companies must differentiate themselves effectively to access new markets and sectors.

Strategies for Business Expansion

Industry experts recommend three core strategies for construction professionals looking to diversify their services: adding complementary services, expanding into new industry sectors, and pursuing geographic diversification. While geographic diversification remains challenging, it is a common goal for companies aiming to enter markets with growth potential. Before venturing into new territories, business owners are urged to comprehensively assess market demand, competition, and operational costs.

Additionally, strategic acquisitions can catalyze growth for construction firms, allowing them to access new capabilities and markets. Leaders must ensure that any acquisition aligns with their long-term strategy and adds significant value, taking into account the investment of resources and time required for integration.

Potential Obstacles Ahead

Despite the positive outlook for many sectors in North Carolina, some areas are expected to decline, particularly in the religious, public safety, and manufacturing sectors. These challenges indicate the necessity for ongoing assessment of market dynamics and adaptability in business strategy.

In summary, while North Carolina’s construction industry is poised for significant growth in residential construction and data center expenditures, widespread challenges include rising costs and competition. Companies must strategically navigate these complexities to sustain and amplify their success in an ever-evolving landscape.

Key Data Overview

Metrics	Growth/Forecast
Residential Construction Spending	Significant increase projected
Multifamily Construction	Decreased slightly
Commercial, Industrial, Civil Sectors	Flat or modest growth
Data Center Construction	5% annual growth projected
Construction Employment Change (2021-2024)	13% increase
Change in Construction Wages (2021-2024)	11.4%

FAQ

What are the projected growth areas for North Carolina’s construction industry?

The residential construction sector is set for a significant increase, alongside other sectors such as lodging, power, transportation, and education, while data centers are forecasted to grow by 5% annually.

Which metropolitan areas in North Carolina are expected to grow?

Raleigh/Durham/Chapel Hill, Charlotte, Greensboro, Wilmington, and New Bern are the top metropolitan areas projected for growth.

What strategies should construction companies consider for expansion?

Companies should explore adding services, expanding into new sectors, and geographic diversification, while being mindful of market competition and demand.

What challenges does the construction industry face in North Carolina?

Rising material costs and labor expenses pose significant challenges, with the risk of flattening or contracting national construction spending in the near future.