Introduction:
In the wake of the recent U.S. presidential administration transition, the construction industry is poised to experience significant shifts. As the Trump administration takes office, industry leaders and stakeholders should prepare for changes across various fronts, from infrastructure investment to regulatory reforms. This article explores six key topics that are expected to shape the industry's future under the new administration.
1. Infrastructure Investment and Priorities:
The Trump administration has consistently emphasized the need for substantial investment in U.S. infrastructure. This focus on infrastructure development could lead to a surge in construction projects nationwide. Industry players should anticipate potential opportunities arising from government-funded projects, as well as public-private partnerships aimed at modernizing the nation's roads, bridges, and transportation systems.
However, the funding mechanisms for these projects remain uncertain. While increased investment is anticipated, the specifics of financing and project prioritization will significantly influence the scope and scale of opportunities available in the construction sector.
For example, companies should monitor how the Trump administration approaches the bipartisan $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), which was signed into law during the Biden administration. It is generally agreed that the incoming Trump administration does not share the same priorities as the Biden administration regarding the types of projects – and the locations of projects – that should receive funding under the IIJA. Thus, the Trump administration may look to alter or halt the allocation of financial resources under the IIJA.
This would be notable because, as of late 2024, only two-thirds of the total funding under the IIJA had been awarded, so the Trump administration will be responsible for awarding nearly $300 billion. Given that there is significant latitude in how – and to whom – IIJA funding is awarded, it would not be surprising to see the Trump administration pivot with regard to specific states or project types.
President Trump has stated he does not believe several specific infrastructure projects should receive federal funding. One such example is the $16 billion Gateway Project in the New York/New Jersey region – one of the largest infrastructure projects in the country – which President Trump sought to delay during his first term. Although funding for the project is in place and work is already underway, future phases could be in jeopardy under the Trump administration. The 2019 Trump administration canceled a $929 million grant for California's high-speed rail project, so it would not be surprising to see similar steps taken during this second administration.
President Trump has also spoken negatively on New York City’s recently implemented congestion pricing program, which is expected to help generate revenue to fund mass transit projects in the region. If New York City’s congestion pricing program is halted by the Trump administration, it could impact roughly $15 billion earmarked for capital improvements planned by the New York City Mass Transit Authority (MTA).
Budget funding cuts to specific agencies and infrastructure programs under the Trump administration may result in decreased funding for other capital investments. For example, under the first Trump administration, budget proposals recommended cutting Amtrak’s budget by 40 to 50 percent.
Given the uncertainty around future infrastructure priorities and funding under the Trump administration, companies should stay informed on legislative developments and prepare to adapt to evolving market conditions.
2. Regulatory Changes:
The Trump administration may also enact significant changes in regulatory reform. Indeed, the Supreme Court’s June 2024 ruling that struck down the “Chevron Doctrine” should provide further support for the Trump Administration if it chooses to reduce oversight by regulatory agencies.
It seems possible that construction projects previously denied approval due to input from federal agencies may find a path to approval under the Trump administration, or through the courts, now that the Chevron Doctrine has been struck down. Pushback from the Trump administration in such situations seems unlikely.
The potential easing of construction permits, environmental regulations, and other safety-related regulations could streamline project approvals and reduce compliance costs, fostering a more business-friendly environment.
Still, these changes may spark debate over safety and environmental protection. It is crucial for industry leaders to balance the benefits of reduced red tape with the responsibility to maintain high standards of safety and sustainability. Engaging with policymakers and advocating for balanced regulations will be key to navigating this evolving landscape.
3. Trade Policies:
The administration's approach to trade policies could have far-reaching implications for the construction industry. These changes are expected and almost certain, as President Trump has clearly identified new and increased tariffs as a major element of his approach to increasing domestic competitiveness and raising revenue. The first set of these new tariffs – a 25% tariff applied to all goods from Canada and Mexico starting February 1, 2025 – was announced within hours of President Trump taking office this week.
Changes in trade agreements and the introduction of new or increased tariffs might affect the cost and availability of construction materials, impacting project budgets and timelines. With a potential lack of predictability for material and equipment pricing due to potential tariffs, it may simply not be possible for investors to give approval for certain projects.
While the Trump administration’s proposed tariffs may ultimately increase domestic competitiveness and drive material and equipment sourcing back to the United States from overseas, it would likely come with a period of near-term uncertainty and turmoil.
Construction companies should prepare for potential disruptions in supply chains and consider diversifying their sources of materials. Stakeholders should consider whether or not it is feasible to expedite the procurement of materials and equipment coming from overseas in order to mitigate the cost impact of potential tariffs that may be coming in short order. Understanding the nuances of new trade policies and their effects on the industry will be essential for maintaining competitiveness in a potentially volatile market.
4. Immigration Policies:
Immigration reform under the Trump administration is likely to heavily influence the construction labor market. The availability of both skilled and unskilled labor may be affected by changes in immigration policies, with potential impacts to project timelines and costs.
President Trump has vowed to “seal the border” and enact “mass deportations” of those who have entered the United States illegally. Within hours of taking office, new policies were announced, and enforcement actions have begun, to reduce immigration and remove undocumented immigrants from the country.
The share of the construction workforce that is undocumented varies between different trades, but ranges from five to seven percent for mechanical, electrical, and plumbing trades, to more than 20 percent for construction laborers, and up to 30 percent or more for trades such as roofers, painters, and drywall installers. Labor shortages could result in an industry-wide slowdown. Additionally, there could be higher construction costs as companies raise pay levels in order to find and retain the labor needed to staff projects.
To mitigate potential labor shortages, construction firms should explore strategies for workforce development and training. Building partnerships with educational institutions and investing in apprenticeship programs may also help bridge the skills gap and ensure a steady supply of qualified workers. Though these types of programs may be slow to develop the labor pool needed, there may be no better alternatives in the near-term to solving the construction labor equation.
5. Renewable Energy and Sustainability Initiatives:
The Trump administration's energy policies may shift focus away from renewable energy and sustainability initiatives. This could influence construction practices, particularly in the realm of green building certifications and energy-efficient design.
On the campaign trail, President Trump explicitly stated a desire to repeal the Inflation Reduction Act (IRA), which contained hundreds of millions of dollars in new spending, tax cuts, and credits for many initiatives intended to drive investments in clean energy, resilience, and related areas throughout the country. A repeal of the IRA could result in decreased demand for hybrid and electric vehicles, which would impact investment in the industries that produce and support the manufacturing of those vehicles.
On the other hand, while the Trump administration may look to pull back investments in clean energy and resilience, there will likely be a push for initiatives that drive greater investment in domestic oil and natural gas production. Indeed, President Trump’s selection for Energy Secretary is Chris Wright, the CEO of Liberty Energy, which is one of the largest fracking companies in the U.S. Players in the fossil fuel energy sector of the construction industry could benefit from policy changes related to oil and natural gas.
Despite potential policy shifts, the growing demand for sustainable construction practices is unlikely to wane. Industry leaders should continue to prioritize energy efficiency and sustainability, aligning with long-term trends and consumer preferences. By maintaining a commitment to green building practices, companies can position themselves as leaders in a changing market.
6. Opportunity Zone Program:
The Opportunity Zone Program has been a significant driver of investments in real estate, with nearly $40 billion invested into Qualified Opportunity Funds (QOFs) since 2019. The vast majority of these investments have gone toward multifamily residential and commercial developments.
However, the current Opportunity Zone Program is scheduled to end in 2026, and given that developers must deploy Opportunity Zone funds ahead of the program’s end date, the pace of funding has recently slowed. Although a bipartisan bill to extend the program was prepared in 2023, it was never brought to the floor for a vote.
Fortunately for proponents of the Opportunity Zone Program, the Trump administration is seeking to install Scott Turner to lead the Department of Housing and Urban Development (HUD). Mr. Turner also led the Opportunity Zone program’s implementation under the first Trump administration. It is expected that the Trump administration will prioritize extending the program as part of the broader effort to increase domestic investment.
If the Opportunity Zone Program is in fact extended under the Trump administration, it would likely incentivize developers to invest in distressed communities throughout the United States.
Conclusion:
As the Trump administration begins its tenure, the construction industry faces a period of transformation. In this dynamic environment, companies will increase the likelihood of achieving successful outcomes by being nimble and anticipating changes before they happen.
By understanding and adapting to changes in infrastructure investment, regulations, trade policies, immigration, and sustainability, industry leaders can navigate this evolving landscape and seize new opportunities.
© Copyright 2025. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
