Favorable Financing Creating Construction Tailwind as Labor Shortage Continues

DPR Construction sees growth in key market sectors despite workforce challenges

REDWOOD CITY, Calif., Dec. 16, 2024 /PRNewswire/ -- More favorable interest rates and materials prices are colliding with an ongoing labor shortage, bringing a mix of challenges and opportunities for construction project owners, according to DPR Construction's latest Market Conditions Report. Labor shortages are a critical issue with 77% of contractors reporting increased difficulty in filling skilled craft positions compared to a year ago. While post-election economic policies are still being determined, lower interest rates and inflation are opening financing options for construction project owners.

"Factors like interest rates and inflation will continue to play a significant role in determining financing options for construction projects," said Matt Murphy, DPR's core markets leader. "That's why we believe it's crucial to plan ahead for variability, ensuring stakeholders' budgets are flexible enough to handle any surprises. It's a good time for owners to consider various financing options, including traditional loans, public funding, or private investments, to secure the best terms for projects."

For example, the Life Sciences sector is experiencing robust growth, highlighted by increased demand for specialized facilities, including research labs, biomanufacturing plants, and innovation hubs. This momentum is expected to continue into 2025 and high demand for the limited skilled labor to execute these types of large-scale technical projects requires planning as early as possible to maintain schedules.

Other key market sector trends noted in the report include:

• Advanced Technology – The advanced manufacturing sector is expanding as industries like semiconductors, automotive, and energy scale up to meet the demand for domestically produced high-tech products. The mission critical sector, encompassing data centers and cloud services, continues to grow alongside the rising need for digital infrastructure. DPR leaders are noticing a surge in data center development.
• Commercial – With a more favorable financing environment, developers can examine expanding their portfolios into sectors where there is high demand for their vacant spaces such as manufacturing, data centers, and student housing.
• Healthcare – Lower interest rates are expected to enhance access to capital and refinancing options in the healthcare sector by in 2025. As the healthcare financing landscape shows positive changes, DPR leaders believe now is time for owners to get in front of potential challenges by creating a strategic long-term capital investment plans.
• Higher Education – DPR leaders are seeing a positive spending projections allowing for more student housing projects, technical interdisciplinary research facilities, modernization of stadiums, and creating a space for new technologies and advancements in personalized learning for students.

To learn more about key market trends to look for in 2025 and see how top indices are trending, explore DPR's interactive market conditions dashboard.

About DPR Construction

DPR Construction is a forward-thinking, self-performing general contractor and construction manager specializing in technically complex and sustainable projects for the advanced technology, life sciences, healthcare, higher education and commercial markets. DPR's portfolio of work ranges from large-scale new construction to small tenant improvements and special projects. Founded in 1990, DPR is a great story of entrepreneurial success as a private, employee-owned company that has grown to a multi-billion-dollar organization with offices around the world. The company is strategically focused on delivering more predictable outcomes through applications of virtual design & construction, prefabrication, its team of self-perform craft, and leveraging data to learn and improve from. DPR consistently ranks among the top building contractors and employs approximately 11,000 professionals across its family of companies. For more information, visit http://www.dpr.com.

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DPR Construction
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SOURCE DPR Construction