KEY POINTS
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Midwest nonresidential construction projected to drop 5.7% in 2025, with building construction falling 21.7%—the steepest regional decline nationwide.
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Civil construction is forecast to grow 19.6%, and education spending is forecast to rise 1.7%, outperforming national projections of stagnation or decline.
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Midwest commercial, industrial, and community sectors see sharp declines of 30 percent-plus, contrasting with national growth or smaller contractions.
The Midwest construction market is facing challenges in 2025, with spending decreases in nearly every category. Total Nonresidential construction (civil construction and nonresidential buildings) is projected to fall 5.7%, from $136 billion last year to $128.2 billion this year.
This decline exceeds ConstructConnect’s national forecast of a 2.2% contraction for total nonresidential spending, reflecting particularly difficult conditions in America’s heartland.
Midwest Facing Big Drop in Nonresidential Building Construction
A significantly sharper decline is anticipated in Nonresidential Building construction (which excludes civil construction) in the Midwest, with ConstructConnect projecting a 21.7% contraction, reducing the total to $65.3 billion.
That’s the biggest drop among all US regions. ConstructConnect’s forecast predicts a 3.9% decrease nationwide in nonresidential building activity.
Education and Civil Construction: The Only Bright Spots for Midwest’s Q2 2025 Outlook
Before going into the other decreases, let’s go over the only Q2 gains for the Midwest region: Civil construction and Education
Civil construction (roads, bridges, and power infrastructure) is the lone significant bright spot, with a projected growth of 19.6% pushing investments to $62.9 billion in 2025. This substantial growth bucks the “no changes” trend ConstructConnect is forecasting for the national 2025 forecast.
What’s driving this growth? ConstructConnect Chief Economist Michael Guckes says, “The importance of megaprojects (those worth at least $1 billion) in the Midwest is key to the region’s near-term expansion.”
Educational construction is projected to see a modest 1.7% increase, resulting in $17.5 billion of spending in 2025. This growth also defies the national trend of Education spending, as ConstructConnect forecasts it to fall 10.5% nationwide.
Commercial Construction Expected to Fall in Midwest, Differing from National Forecast
Commercial construction, which showed strength in the Midwest in 2024 at $32.8 billion, is projected to drop 30.1% in 2025, to $22.7 billion. This stands in stark contrast to the national forecast, which anticipates Commercial construction growing by 7.4% in 2025.
Midwest Community Construction Facing 45% Decline in Spending
Community construction (amusement/sports centers, churches, and libraries/museums) in the Midwest is also expected to face a downturn in 2025. Spending on Community projects is expected to fall 44.7%, going from $8.5 billion to $4.7 billion.
While ConstructConnect’s recent construction starts data for April 2025 show Community construction up 37.5% year-over-year nationally, it should be noted that increase is almost entirely propped up by a massive jump in the subcategory of Sports Arenas / Convention Centers.
Industrial Construction Spending Continues to Slide in the Midwest
Industrial construction continues its multi-year slide in the Midwest, projected to shrink 31.3%, going from $21.8 billion in 2024 to $15 billion in 2025. This is not an unexpected development.
Referring to the national forecast, Guckes notes, “Manufacturing is likely to continue its contraction in 2025, estimated at 9.3%,” although the Midwest is clearly experiencing a much more severe adjustment.
Midwest Multi-Family Residential Spending Falls More than National Rate
Multi-Family Residential construction offers little relief for the Midwest, with a forecasted 7.9% drop bringing totals to $13.3 billion in 2025. This decline is steeper than the national forecast of a 3.9% contraction. According to Guckes, the declines reflect a combination of high financing costs coupled with a historically unaffordable housing market.
Overall Midwest Outlook for Q2 2025
It’s clear the Midwest is facing a challenging 2025, with steep declines across most sectors. Despite the drops in Nonresidential, Commercial, Community, and Industrial construction, modest growth in Civil and Educational projects—two categories that aren’t projected to grow nationally—offers a glimmer of hope.
