North Carolina Construction News staff writer
Optimism within the U.S. construction industry rebounded significantly in the third quarter of 2025, according to the latest Sentiment Index released by FMI, a consulting firm for the built environment based in Raleigh, NC.. The quarterly survey is produced in partnership with the Construction Industry Round Table (CIRT), an association composed of approximately 130 CEOs from the leading design and construction firms in the United States.
The CIRT Sentiment Index rose to 65.0 in the third quarter, a substantial jump from 54.0 in the previous quarter. According to the FMI report, this positive shift is driven by strong project pipelines, an improved outlook on the U.S. economy, and easing cost pressures.
The Design Index also saw a significant increase, rising to 58.5 from 44.9 in the second quarter.
Economic and sector outlook
Sentiment regarding the overall U.S. economy climbed to an index score of 49.0 from 30.4. Looking ahead, about 27% of CIRT members expect the U.S. economy to improve next quarter, while 44% anticipate no change and 29% foresee a deterioration.
The nonresidential construction sector is viewed more favorably than the residential sector. The report identifies health care, manufacturing, and public works as the strongest sectors, while office and lodging continue to lag.
Costs, challenges, and opportunities
While cost escalation remains a concern, pressures from building materials have eased, with that index dropping to 87.5 from a high of 98.2 in the prior quarter. Labor costs, however, edged slightly higher, with the index moving to 76.9 from 75.0.
In open-ended responses, CIRT members identified several challenges, including:
- Policy instability and high interest rates
- Tariffs and delays related to the federal Project Labor Agreement (PLA) mandate
- Labor market pressures tied to immigration enforcement
Despite these hurdles, industry leaders pointed to significant opportunities in artificial intelligence, the onshoring of manufacturing, renewable energy, and infrastructure renewal..
Business strategy for 2026
Looking ahead, CIRT members identified profitability and the quality of their backlogs as the two most critical drivers for business resilience going into 2026. Strategic plans show an emphasis on selective bidding, pursuing alternative procurement opportunities, and targeted hiring. Many firms also plan to expand their services into new segments and geographic regions.