Nationwide said industry investment remains cautious despite government stimulus support of select sectors like healthcare and education. Meanwhile, construction material costs have stabilized after surging in recent years—although tariffs on imported materials and shifting fiscal priorities could further cloud the outlook.
“Given rising economic pressures, persistent labor shortages and increasing volatility in weather-related events, the roles of insurance and risk management have become increasingly vital to the strategic resilience of construction firms,” Nationwide’s Construction Practice Leader, Tonya Hahn, told PropertyCasulty360.
Other key insights…
- Input costs: Material price inflation has eased but remains elevated. New tariffs and global supply chain disruptions could reignite cost pressures.
- Construction of buildings: Growth has moderated, especially in commercial and manufacturing sectors. Infrastructure spending remains a bright spot, though future funding is uncertain.
- Heavy and civil engineering: Public investment in highways and utilities continues, but political shifts may impact future funding.
- Specialty trade contractors: Labor shortages and rising costs challenge profitability, especially in residential trades.
Hahn said businesses face a challenging environment marked by rising costs, labor constraints and uneven demand.
“In this context, implementing robust risk management programs is more critical than ever,” she added. Tailored insurance solutions, proactive loss control and expert guidance can help construction firms mitigate risk, protect margins and position themselves for long-term success.”
By 2034, the global construction insurance market is expected to reach $92 billion, according to market.us, up from $39.2 billion last year. Also in 2024, North America dominated with a 37.3% market share, generating approximately $14.6 billion in revenue, supported by robust construction activity and regulatory requirements.
