Construction Industry Trends to Watch in 2025

The construction industry has encountered volatility and uncertainty in recent years. Consequently, Canada’s construction industry witnessed an estimated 3.1% fall in output in 2024, according to construction consultant Linesight. However, Linesight predicts a more favourable 2025, with an anticipated annual growth rate of 2.2%.

Despite this optimism, construction businesses should monitor several key trends that could hamper the industry this year. Organizations can adjust their risk management practices to lessen exposures by staying up-to-date with the latest sector developments.

Consider the following four trends expected to impact the construction industry in 2025:

1. Labour shortages—According to the Canadian Construction Association, the industry has more than 93,000 unfilled job openings. If labour shortages persist, construction businesses may resort to hiring a larger number of new or inexperienced employees, which could increase construction site accident and injury rates. Measures that construction businesses may leverage to address labour challenges in the coming year include increasing outreach efforts at community events (e.g., high school job fairs), upskilling and reskilling initiatives, and exploring underrepresented demographics to increase talent pools. Regardless, organizations must provide comprehensive and ongoing safety training to existing workers to reduce the likelihood of accidents due to inexperience.
2. Increased sustainability efforts—Buildings contribute 18% of all greenhouse gas emissions, according to the government. As such, the construction industry is expected to address its contribution to emission goals by taking steps to ensure eco-friendly and sustainable practices. These steps include using mass timber, leveraging modular construction, and electrifying fleets and machinery. Additionally, deep retrofits that involve upgrading multiple building systems and equipment (e.g., replacing roofs and improving insulation) may be likely in the coming year.
3. Technological advancements—Numerous construction businesses are leveraging technology to streamline processes, and technological advancements will remain a common theme in 2025. Robotics, 3D printing, wearable safety sensors and the Internet of Things will help automate construction tasks, improve efficiency and enhance safety. In addition, businesses will use generative artificial intelligence to generate optimal plans, design more efficient buildings and enhance risk management programs. However, increased technology use can lead to elevated cyber exposures. Employers must review their digital exposures and consider robust risk mitigation measures in the year ahead.
4. Political upheaval—Prime Minister Justin Trudeau’s resignation on Jan. 6, 2025, could have implications for the country’s housing policies. Additionally, the uncertainty surrounding Trudeau’s replacement—and any policy ramifications—could lead to slower market activity as buyers and investors adopt a “wait-and-watch” approach. Further hampering the sector, Donald Trump’s return as the president of the United States could impact trade policies with implications for all industries, including construction. Businesses should stay abreast of regulatory changes and consider measures to lessen the impact of political instability.

Several trends are impacting the construction sector. Construction businesses can effectively position themselves to maintain long-term growth and operational success by tracking these developments and mitigating any associated exposures.

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