Anirban Basu, chief economist for Associated Builders and Contractors (ABC), presented “Construction Executive‘s 2025 Q3 Construction Economic Update and Forecast” yesterday. According to ABC, "Basu’s presentations are designed to inform commercial construction contractors on general economic conditions affecting the current construction landscape as well as construction-specific economic indicators, including the hottest regions and market sectors, the latest on materials and labor costs, and predictive indicators such as the AIA’s Architecture Billings Index and ABC’s Construction Confidence Index and Construction Backlog Indicator."
Key Quotes:
ON U.S. ECONOMIC CONDITIONS
- "In the third quarter of 2025 the us economy grew."
- "Nonresidential fixed investment is up."
- "Among the things not being purchased are inputs to construction and construction equipment."
- "The wealthy have never been wealthier. I suspect that many other consumers are struggling right now, where is that pressure coming from? Inflation."
- "This is the key issue for contractors going forward: interest rates."
ON THE U.S. LABOR MARKET
- "This is where you will see evidence that the U.S. economy is in fact softening."
- "We now have more unemployed Americans than job openings."
- "Who has been the leader here? The South [On employment growth rates in the 25 largest metro markets]. Who’s number one here? Minneapolis. Why the Midwest you ask? [On construction employment growth rates in the 25 largest metro markets]. The Midwest has been quite good at attracting data centers and major manufacturing facilities.
ON TRUMP ADMIN POLICIES
- "About one in eight contractors in our survey indicates they are working on a data center project. The average backlog is 12 months. Those contractor not working on a data center—their backlog is eight months."
- "One of the reasons the backlog has held up is we have this AI infrastructure spending boom."
- "We've been seeing reshoring in this country since at least 2010 pick up, [On the manufacturing boom since February 2020] but maybe the tariffs are not speeding up reshoring like we thought they would."
OUTLOOK
- "More of you are saying your margins will be thinner going forward."
- "But risk of recession is high right now because recovery and expansion is so narrowly founded right now."
- "Forecast is for growth in 2025 but there are still risks."
Read the full recap on ConstructionExec.com
EquipmentWorld.com has also posted a recap of the webinar, including:
"He predicts a return of inflation, interest rates remaining higher for longer, U.S. middle-class and lower middle-class residents facing worsening financial circumstances because of higher tariffs and prices, and the risk of a falling stock market.
In a typical year, the risk of recession is 10% to 15%, but for 2025, the risk has risen to 30% to 40%, among financial analysts at major brokerages, Basu says.
The reason for the higher risk, he says, is an economic expansion with a narrow foundation. Rather than widespread growth, it has been concentrated in booming data center construction, record-high stock and gold prices and wealthy consumers. “Other than that, there aren't really major drivers to the economy,” he says.
Last year, U.S. gross domestic product rose 2.8%. This year, economists predict growth of 1.5% to 2%.
“Ladies and gentlemen, that is not recession,” he said"
