News Summary
The construction sector in New Jersey is expected to see a 17% increase in local spending, surpassing $16 billion by 2025. Key growth drivers include a recent interest rate cut and a robust pipeline of projects worth $140 billion over five years. Despite labor shortages and rising costs, the outlook remains positive as the civil construction sector thrives and multifamily housing shows resilience.
Long Branch, New Jersey – The construction industry in New Jersey is poised for significant growth, with a projected 17% increase in local spending above 2024 levels, according to the latest analysis from the Associated Construction Contractors of New Jersey (ACCNJ). This forecast was shared during the ACCNJ’s Fall 2025 Convention, attended by over 200 industry professionals at the Ocean Place Resort & Spa.
In an analysis presented by Jeffrey Otteau, Managing Partner and Chief Economist at the Otteau Group, the aggregate construction spending in the state is expected to exceed $16 billion in 2025. Otteau highlighted key factors driving this growth, including a recent quarter percentage point interest rate cut announced by the Federal Reserve on September 17, 2025. This decision is anticipated to stimulate construction activity and project initiation across various sectors.
Although national construction spending has experienced a 3% decline, the New Jersey market continues to thrive, indicating resilience in the face of broader economic challenges. Commercial investment real estate sales saw a drop from $13 billion to $6 billion as interest rates climbed, but early signs of recovery have begun to surface.
Construction costs in New Jersey have escalated sharply, with increases of 34% in North Jersey and 32% in South Jersey since the pandemic began. However, with declining interest rates and inflation rates dropping to 2.9%, the construction sector is expected to witness heightened spending and job creation moving forward. A decrease in the average price of Brent crude oil from $82 per barrel in 2023 to $68 in 2025 also suggests potential for lower inflation and construction costs, creating a more favorable environment for new projects.
The civil construction sector notably experienced substantial growth this year, with a 145% increase in project starts and an 88% rise in spending, reaching $2.34 billion in 2025, up from $1.40 billion in 2023. In contrast, the industrial construction sector faced a significant correction, marked by a 73% drop in starts attributed to excess growth in previous years. Meanwhile, multifamily housing spending increased by 8%, with a 20% rise in construction starts, indicating a robust market for apartment projects.
Looking ahead, New Jersey has a projected pipeline of construction projects amounting to approximately $140 billion over the next five years, reflecting a strong outlook for the industry. Nevertheless, concerns about labor supply persist due to a noticeable lack of young workers entering the construction field. Wage inflation is also a critical issue, driven by a growing demand-supply gap in the labor market.
The positive projections for the construction sector suggest that it will not only generate increased value and deal flow but also contribute significantly to repair and improvement programs as commercial property values start to rise. The economic impacts of construction extend beyond direct growth, touching on indirect and induced effects, including job creation and enhancing local tax revenues.
As the New Jersey construction industry moves forward, challenges such as labor shortages and tariffs continuing to inflate costs remain a concern. However, the overall outlook is positive, with expectations for robust activity and growth in the coming years.
Deeper Dive: News & Info About This Topic
HERE Resources
Colorado Construction Sector Struggles with Rising Tariffs
Baltimore’s Pie Time Closes After Years of Service
Homecoming Parade and Football Game Canceled in Alexandria
Data Centers Drive Rising Electricity Demand in Virginia, North Carolina, and Ohio
Tragic Workplace Incident Claims Life of Burnsville Construction Worker
Environmental Crisis in Baltimore: 25,000 Dead Fish Found
ServiceTitan Launches Atlas AI Platform to Transform Construction Management
Baltimore Housing Market Faces Downturn Amid Rising Cancellations
Baltimore County Welcomes Major Steel Manufacturing Expansion
University of Wisconsin-Madison Tests High-Tech Construction Robot
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 BALTIMORE WRITER
BALTIMORE STAFF WRITER The BALTIMORE STAFF WRITER represents the experienced team at HEREBaltimore.com, your go-to source for actionable local news and information in Baltimore, Baltimore 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 the Baltimore Book Festival, Preakness Stakes, and Artscape. Our coverage extends to key organizations like the Baltimore Chamber of Commerce and Visit Baltimore, plus leading businesses in shipping and healthcare that power the local economy such as the Port of Baltimore and Johns Hopkins Medicine. As part of the broader HERE network, we provide comprehensive, credible insights into Maryland's dynamic landscape.
