Global Construction 2025 Outlook: Industry is Well-Positioned to Build a Way Forward

Our 2025 outlook for the global construction sector is stable. We expect our portfolio of construction companies, which largely consists of North American and European players that operate nationally and/or on a global scale, to continue to benefit from their strong balance sheets, high backlogs, and strong demand coming from the public sector and private sector. As a result, the credit risk profiles of these firms should remain stable through the year and continue to remain reflective of the current credit ratings.

Key highlights include:
-- The current stabilization of supply chains should make navigating project bids and delivering projects manageable in 2025.
-- Sector challenges, such as rising geopolitical risks and evolving policy landscapes, remain and must be actively managed for margin stability.
-- Smaller contractors without the benefit of diversification in scope of geography may face prolonged strain through 2025.

"Long-term demand remains positive, stemming from urbanization trends, sustainability, and energy resiliency initiatives. However, a level of uncertainty remains in the U.S. with respect to policy changes. Construction input prices may rise with potential trade policy changes of the incoming U.S. administration. We expect contractors that may be affected by these changes have begun planning ways to mitigate these challenges, including moving ahead material orders on longer-term, fixed-price contracts," said Margaret Rabba, Vice President, Diversified Industries.