Northeast commercial construction spending is projected to grow 643% year over year in Q2 2025, driven by private office and terminal megaprojects.
Multi-family, educational, and government construction are all seeing sharp declines, with government spending dropping over 37%.
Despite a slight dip, Northeast industrial construction holds near $7B, supported by a substantial uptick in manufacturing starts.
As ConstructConnect projects a 1.8% decline in total construction starts across the U.S. this year, the Northeast states are at least receiving some good news for 2025’s second quarter, primarily driven by commercial projects.
Overall, Total Nonresidential Construction (civil construction and nonresidential buildings) in the Northeast is forecasted to reach $95.3 billion in second-quarter spending, according to ConstructConnect. That amount is nearly 17% more than the region saw this same time last year.
Spending is growing in the Northeast because of Commercial construction. Back in 2024, the Commercial segment reported some $2.2 billion in spending. This year, however, the region is projected to spend $16.6 billion—that’s an increase of 643%.
The jump in Commercial spending mirrors trends that ConstructConnect Chief Economist Michael Guckes has seen across the U.S.
In ConstructConnect’s Q2 2025 Construction Starts Forecast, he calls out the “robust growth” expected nationwide for the subsectors of Private Offices and Transportation Terminals, with both seeing megaprojects—those worth at least $1 billion—breaking ground this year.
Commercial construction is where the Northeast’s growth ends, however.
Multi-Family Residential construction spending in the region remains on the decline, with starts projected to drop nearly 25% from $18.7 billion in 2024 to $14.4 billion in 2025.
This drop significantly exceeds the 3.9% decrease projected for Multi-Family construction nationwide.
Two key factors are driving the spending downturn, according to Guckes.
“High financing and rising materials costs remain a major challenge for builders, while apartment vacancy rates in some areas are raising overcapacity concerns,” he explains.
Educational construction is also expected to shrink in the Northeast this year. Our latest figures project an 8.7% decline in spending, from $15.8 billion to $14.5 billion. The fall aligns with the national forecast showing Educational Facilities declining by 10.5%.
Government construction (governmental offices, police and fire facilities) faces the most dramatic contraction in the Northeast, with spending forecasted to fall by 37.3%, from $9.3 billion in 2024 to $5.9 billion in 2025.
As of March 2025, we forecast government construction spending in the Northeast to continue to shrink to $4.5 billion by 2027 as annual government office starts fall by more than half during this time.
Thankfully, Industrial construction in the Northeast is showing relative stability. After a 46% spending increase in 2024, driven by a doubling of warehouse starts to over $3.25 billion, ConstructConnect forecasts industrial project spending to decrease 5.7% to $7.2 billion. Our forecasts for the next two years predict minor decreases each year, but keeping spending within the $7 billion range.
ConstructConnect’s models anticipate a very strong 2025 for Northeast manufacturing, with starts rising from $2.23 billion in 2024 to $4.81 billion by year-end.
While commercial projects are driving growth in the Northeast, the declines in other categories cannot be overlooked. The stability of Industrial construction, even though that is also on the decline, offers some cushion amid the other drops.