While commercial construction in the US faces labor and cost challenges, the overall trajectory remains positive, driven by industrial construction, tax incentives, private equity activity, foreign investment, and green building initiatives. That's the verdict of QBE North America's newly released US Commercial Construction Outlook.
The report noted that labor shortages continue to impact construction firms. Despite record-high construction employment, an aging workforce and immigration restrictions are contributing to a gap in available skilled labor.
Insurers warn that companies attempting to fill these gaps with less experienced workers could see increases in workplace accidents, property damage, and construction defects, making tailored risk management and insurance coverage critical.
Material costs are also on the rise, with tariffs pushing prices on key inputs such as steel, aluminum, and copper well above early-year levels. Insurers may face increased claims exposure related to project delays, cost overruns, and contract disputes if these supply chain pressures are not effectively managed.
Investment in construction is expected to continue over the next several years but may taper off once federal subsidies, tax credits, and domestic manufacturing funding are fully allocated. From an insurance perspective, this period of heightened activity underscores the importance of proactive risk assessment, including builders’ risk, general liability, and professional liability coverage to protect against unforeseen losses.
The outlook for the next two to three years remains positive, with advanced manufacturing investments sustaining demand. However, insurers and brokers are urged to work closely with clients to address evolving risk factors. Geopolitical developments, rising tariffs, and workforce challenges could all affect project timelines, budgets, and overall risk exposure.
Ryan Powers, QBE North America’s SVP and head of construction, emphasized that construction companies and their insurers must collaborate to safeguard projects. Ensuring adequate coverage, providing safety and training support for new workers, and monitoring geopolitical and economic developments will be key to mitigating potential losses and protecting both financial stability and project completion, he added.
