Economic and construction sectors face a complex landscape in 2025 shaped by tariffs, inflation, interest rates and material costs, alongside evolving innovations like mass timber that promise sustainability and efficiency gains. We explore these dynamics and their implications for the construction industry.
View the full reportSubscribe to The Essentials
The economic outlook for 2025 is a blend of highs and lows. Markets have reached new peaks, but the landscape remains complex due to factors like inflation, interest rates, and a declining dollar. The U.S. economy is experiencing a mix of growth and challenges, with fluctuations in GDP and the value of the dollar.
Inflation is slightly above the Federal Reserve’s target, and interest rates remain a key factor in economic stability.
The labor market is steady, but job growth has been downgraded in recent months. These economic indicators create a hopeful yet challenging environment for the future.
View the full report
17%
average tariff rate for Q4 2025, the highest level seen since the 1930s.
1.2%
average GDP growth rate for 2025 so far, 50% below typical rate of growth.
$100
U.S. Dollar Index as of July, down from January but trending upward in final two quarters.
Global trade is being reshaped by shifting tariffs, and construction leaders are facing rising costs and supply chain risks. The U.S. government has imposed tariffs on various goods, affecting trade with major partners.
Interest rates are another critical factor influencing the construction outlook.
Elevated rates are making it more challenging for developers to secure financing for new projects, leading to a slowdown in construction activity.
Construction firms are adopting innovative approaches, such as bulk purchasing and long-term contracts, to manage these rising costs and ensure project viability.
Material prices are soaring, driven by tariffs and inflation, putting significant cost pressure on metal and glass building systems.
The construction industry is seeing substantial increases in the cost of materials like steel, aluminum, and glass. These price hikes are impacting project budgets and timelines, making it crucial for construction leaders to find ways to manage these rising costs.
Strategies such as bulk purchasing, long-term contracts, and innovative material use are being employed to mitigate the impact of these price pressures.
Technology in wood, particularly mass timber and engineered wood, is transforming the way we build structures. Mass timber, including cross-laminated timber (CLT) and glulam, offers structural strength, environmental benefits, and aesthetic appeal. These materials reduce carbon emissions and promote sustainability, making them an attractive alternative to traditional materials like steel and concrete.
Engineered wood products are also gaining traction due to their versatility and durability.
Innovations in wood technology are enhancing the performance of these materials, making them suitable for a wide range of construction projects. As the construction industry continues to prioritize sustainability and efficiency, the adoption of these advanced wood technologies is expected to grow, setting new standards for modern building practices.
Mass timber is more than a buzzword; it marks a pivotal shift in how we design and construct the built environment. As the demand for smarter, more efficient and more sustainable building practices grows, this innovative framing approach is taking root across the industry.
According to WoodWorks, a nonprofit organization that provides technical support and resources to advance wood construction in the U.S., more than 2,000 mass timber projects have been constructed or are in design across all 50 states. What was once considered niche is now scaling rapidly as colleges, corporate developers and civic institutions invest in timber to meet ambitious carbon, wellness and performance goals.
With every new project, the knowledge base expands, the supply chain strengthens, and cost-efficiency improves, accelerating momentum across the country.
At the same time, the stakes have never been higher. Buildings are responsible for nearly 40 percent of global carbon emissions, and owners are looking for solutions that deliver both immediate performance and long-term value. Engineered timber meets the moment, combining structural strength and biophilic beauty with tangible environmental benefits.
At the forefront of this evolution, construction firms can now focus on helping their clients branch out into smarter, more sustainable ways of building.
Read the full story in this edition
View full report
As the construction industry faces mounting pressures from rising material costs, stricter carbon regulations, and increasing demand for sustainable solutions, a new generation of engineered wood is stepping into the spotlight.
Long valued for its warmth and aesthetic appeal, timber is evolving far beyond its traditional role, thanks to innovations in densification and chemical enhancement.
These advanced materials, often referred to as densified engineered wood, are created through processes that dramatically boost wood’s natural strength, durability, and resistance to fire, water and even impact.
The result? A high-performance alternative that can match or exceed steel in tensile strength at a fraction of the environmental cost and weight.
While not yet ready to fully replace steel or concrete in every application, densified wood technologies are rapidly gaining traction in commercial construction. Challenges remain, from building code approvals to long-term performance data. But interest is growing, pilot projects are emerging, and manufacturers are working to scale production. As awareness spreads, this category of timber tech is poised to redefine how we think about structure, sustainability and design.
If you’re keeping an eye on what’s next in construction, engineered wood may be one of the most transformative trends on the horizon.
Read the full story