Construction

3 things we learned from the 2025 AGC report

Discover the major insights from the Associated General Contractors of America (AGC) 2025 Construction Hiring and Business Outlook

The Associated General Contractors of America (AGC) 2025 Construction Hiring and Business Outlook report runs each year in collaboration with Sage.

The insights gathered reveal crucial information—including where key challenges and growth areas are set to impact the construction industry.

This year, more than 1,100 contractors from across the US took part in the survey, providing their thoughts on topics as diverse as hiring, technology investment, and business planning.

While all our insights are available in the full report, here are 3 which are particularly important for construction finance leaders to note.

Here’s what we’ll cover:

1. Public sector and infrastructure projects are driving growth

Results from the 2025 survey show that contractors are optimistic about public sector projects, such as water, transportation, and power plant contracts.

Similar large-scale projects are also fueling optimism in the private sector, particularly around the construction of data centers and manufacturing facilities, and their related infrastructure—which constitute huge construction opportunities for those positioned to handle this kind of work.

That positive outlook encompasses education and non-hospital health care facilities too, with construction professionals also identifying the likelihood that these areas will see increased demand across both the private and public sectors.

These positive shifts are likely the result of projects finally getting the green light after delays caused by regulatory reviews and infrastructure funding complexities.

In fact, 18% of respondents say they’ve worked on new projects funded by the federal Bipartisan Infrastructure law—passed in 2021—compared to 9% in 2024.

Key takeaway

Public sector and infrastructure opportunities are abundant, making these critical areas for contractors to target in 2025.

It’s vital to begin preparing for this switch.

2. The skilled labor shortage continues to challenge the industry

The workforce issues which have long concerned the industry will continue to be a challenge in 2025.

Issues surrounding the trades—including staffing, pay, and availability—topped respondents’ lists of concerns this year:

• 62% said that rising labor costs is one of their biggest concerns for the year.
• 59% believed that a key issue would be an insufficient supply of workers.
• 56% said that worker quality was a leading challenge.

Most firms anticipate adding additional workers to their books in 2025 to meet the higher demand for projects.

More than two thirds (69%) of contractors plan to increase their workforce, but nearly 80% report difficulties in finding qualified talent—raising questions around the potential success of those with hiring plans.

Likewise, concerns are growing about the potential impact of immigration policy changes, which may further reduce the workforce pool.

To combat these challenges, many contractors have increased wages, benefits, and other incentives to attract and retain skilled workers.

More than half (53%) of those surveyed increased their base pay rates in 2024 by a wider margin than they had the year before.

Almost a third (28%) provided incentives or bonuses to workers, while 28% improved employee benefits packages.

Only 10% of respondents had provided no increases to pay, incentives, or bonuses in 2024—highlighting just how widespread the staffing challenges are, and how keen the construction industry has been to circumvent them.

Key takeaway

Focusing on hiring, retention strategies, and training are more critical than ever for staying competitive, as is adopting technology to operate more efficiently and attract younger, more tech-savvy talent.

3. Investment in technology is set to surge

As the industry navigates increasing market uncertainty and worker shortages, construction firms are looking for ways to boost efficiency and productivity.

The AGC 2025 report revealed that nearly all of those surveyed plan to either increase or maintain their level of technology investment.

Respondents indicated they plan to increase investment in several areas in the year ahead:

• 44% expect to increase investment in AI
• 40% expect to increase investment in document management
• 36% expect to increase investment in accounting
• 35% expect to increase investment in project management
• 35% expect to increase investment in estimating

Technology investment has continued to grow in cloud-deployed software including 61% of firms using it for project management, (a 3% increase from last year), and 48% using it for field operations. Another 41% are using cloud-based time-tracking applications.

Mobile software is also proving particularly useful to field teams.

More than two thirds (69%) of respondents use it for daily field reports, and 56% report using mobile technology to access customer and job information in the field.

Only 11% of field teams have no plans to use mobile technology, which reflects a small minority dissenting from the construction industry’s increasing focus on efficiency as well as connecting field and office teams.

We’ve also found that as technology adoption becomes more and more integral to operations, increasing focus is needed in areas such as cybersecurity, employee training, and cultural changes to maximize the potential of these solutions.

Key takeaway

Embracing the capabilities made possible by technology can help contractors boost visibility for both office and field staff, enhance productivity, and build resilience in a competitive landscape.

But it needs to be introduced in the right way; finding the right solutions to solve specific problems and allowing businesses to do more with less.  

The AGC 2025 Construction Hiring and Business Outlook report

The key learnings from this year’s AGC report prove that the industry is preparing to mitigate the challenges of the year ahead with an increased focus on hiring and retention strategy, technology adoption, and winning infrastructure projects.

The most successful firms will adapt to changing circumstances and leverage the right technology to both alleviate the impact of challenges and discover competitive advantages—an attitude which will prove key as competition grows.

Key takeaways

• Seek infrastructure work to build your portfolio
• Invest in your people strategy to adapt to talent shortages
• Embrace technology to address the industry challenges of today and prepare for the future

These highlights are a snapshot of the valuable insights provided in the full report.

To find out more, read our whitepaper, From talent to tech: How the construction sector is planning the year ahead, and discover how 1,100 contractors are preparing for the year ahead.

From insights to action

Unlock the full story of how construction leaders are preparing for 2025 and beyond—from workforce strategies to tech investments—and get practical guidance to plan your year ahead.