Rising demand for reliable energy in mission-critical sectors is driving the urgent modernization of energy infrastructure and the adoption of alternative energy solutions.
Global construction consultancy Linesight has published its latest Construction Market Insights report, highlighting continued momentum in North America’s construction sector despite global trade uncertainty and the lingering impact of U.S. tariffs.
Resilient U.S. Growth Fueled by Strategic Investments
The U.S. construction industry grew by 4.5% in 2024, surpassing initial forecasts of 2.5%. Growth was driven by robust investments in semiconductors, clean energy, infrastructure, and advanced manufacturing. While moderate expansion is expected through 2028, key drivers such as AI-enabled data centers and high-tech industrial development will sustain the sector’s upward trajectory.
Canada Eyes Rebound After Residential Decline
In contrast, Canada’s construction industry contracted by 1.8% in 2024 due to high financing costs and a slowdown in residential activity. However, a rebound is forecast between 2025 and 2028, with projected annual growth of 2.8%. The recovery is expected to be led by investments in transportation, renewable energy, and critical water infrastructure. Although 2025 GDP growth has been revised down to 1.4% due to tariff impacts, a broader recovery is anticipated by mid-2026.
Tariffs, Supply Chains, and Risk Strategy
“The next phase of growth for North American construction will depend on how the industry addresses infrastructure and supply chain vulnerabilities,” said Patrick Ryan, Linesight’s Executive Vice President for the Americas. He emphasized that U.S. tariffs are heightening supply chain volatility, extending lead times, and inflating project costs. Ryan urged clients to strengthen risk management, localize supply chains, and seek tariff-exempt procurement options to improve project resilience.
Power Infrastructure Emerges as Critical Priority
Power reliability is becoming a pressing concern. As data centers, electric transportation, and advanced manufacturing ramp up, demand for electricity is surging. The U.S. Energy Information Administration (EIA) projects a 35–50% rise in electricity demand by 2040, putting pressure on aging grid infrastructure.
In response, major utilities are increasing capital spending. S&P Global projects that capital expenditures among 47 major U.S. energy utility companies will exceed $212 billion in 2025—a 22% jump from 2024. High-reliability sectors are increasingly adopting Battery Energy Storage Systems (BESS), Small Modular Reactors (SMRs), and hydrogen solutions to manage energy demand and cut emissions.
Ongoing Challenges: Labor and Long-Lead Equipment
While long-lead equipment supply chains began stabilizing in late 2024, volatility remains a concern. Lead times for large electrical components, such as transformers, are expected to grow in the near term. Additionally, labor shortages persist across North America, particularly in high-demand states like Ohio, Utah, and Louisiana, where contractors face challenges hiring skilled tradespeople.
