As the U.S. enters a new political era, Wisconsin’s commercial construction sector is navigating both opportunity and uncertainty. Recent federal investments during the Biden Administration have fueled growth in manufacturing, logistics, and clean energy sectors nationwide. However, the outcome of the 2024 election and the Trump Administration’s policies on trade, regulation, and industrial strategy will heavily influence the future direction of construction projects.

The past five years have witnessed major shifts in the construction landscape. Residential construction surged early in the COVID-19 pandemic while commercial construction declined sharply due to shutdowns and economic uncertainty. Since then, this pattern has reversed: residential activity has slowed, and commercial construction, especially in infrastructure and industrial sectors, has rebounded robustly.

According to analysis by Twisted Nail, a Texas-based construction aggregate supplier, and data from the U.S. Census Bureau, private nonresidential construction spending has grown substantially. Commercial construction, which was hit hard during the Great Recession, briefly surpassed its 2007 spending record just before the pandemic but then dropped from approximately $633 billion to $569 billion (2024 dollars) by late 2021. Since then, a swift rebound has brought spending to over $740 billion by early 2025, the highest level in more than 20 years.

Among sectors, manufacturing leads the growth surge, with spending more than doubling from $98.8 billion in 2019 to $232.1 billion in 2024—a 135% increase adjusted for inflation—driven by federal incentives aimed at boosting domestic production. Warehouse and automotive construction also showed strong increases, rising 42.7% and 47.6%, respectively. Meanwhile, office construction continues to decline, down 10.8%, and lodging has seen a steep drop of 42.6% since 2019.

Regionally, the Sun Belt dominates commercial construction activity. Texas leads by a wide margin with nearly $90 billion in annual spending, more than double any other state, and ranks third nationally in per-capita spending at $2,941. Arizona and North Dakota lead per-capita spending, driven by major high-tech and data center projects. Wisconsin’s commercial construction spending totals $6.8 billion, with per-capita spending at $1,153, reflecting a 24.5% increase in spending over five years and a population growth of 1.7%.

Looking ahead, federal investment remains key, with projects in clean energy, semiconductors, and advanced manufacturing progressing. “Many projects funded through federal legislation passed under the Biden administration are just entering the construction phase,” the report notes. Supply chain resilience and logistics infrastructure development will continue to be priorities, as companies seek to mitigate risks and localize inventory.

However, rising tariffs on imported materials such as wood, steel, and aluminum could slow some projects, creating ripple effects even for domestically sourced materials. Sectors already experiencing downturns—like office, lodging, and retail—may face further challenges, pushing developers to focus on more stable projects.

These trends signal a rebalancing of commercial construction activity and highlight the importance of flexibility among developers, suppliers, and contractors in the coming years. The trajectory of the sector will hinge on upcoming policy decisions and economic conditions shaped in Washington.

Originally reported by APG Wisconsin.