KEY POINTS
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Nonresidential construction in the West is projected to decline 13.9% in 2025, significantly worse than the national forecast of a 2.2% industry contraction.
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Commercial construction in the West will rise 13.9% in 2025, driven by strong growth in data centers and transportation terminals despite widespread sectoral declines.
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Civil, educational, and industrial construction will see steep drops in 2025, but multi-year forecasts suggest a moderate to strong recovery through 2029 across subcategories.
Construction in the West region of the United States faces a significant contraction in 2025, with total nonresidential construction (civil construction and nonresidential buildings) projected to fall 13.9% to $123.3 billion, down from $143.2 billion in 2024. The drop in spending is more severe than ConstructConnect’s national forecast of a -2.2% contraction, indicating challenging conditions in the western states.
Commercial Construction a Rare Bright Spot for the West Region in 2025
There is a bright spot for the West Coast, however. Commercial construction (offices, transportation terminals, parking garages) is forecasted to grow 13.9% in 2025, from $28.2 billion in 2024 to $32.1 billion. The expected performance far exceeds ConstructConnect’s national forecast of a 7.4% expansion in Commercial construction.
Data centers and transportation terminal growth are considered the biggest drivers of the growth in the West, offsetting declines across the rest of the Commercial construction category.
West Region Civil Construction Falls Hard in 2025, but Picks Up in Future Years
Civil construction (roads, bridges, power infrastructure), the largest individual nonresidential category, is projected to decline by 22.1% to $55.4 billion. Such a large drop indicates a major pullback in infrastructure investment, but some Civil subcategories are not falling as much.
Water and sewage treatment projects, for example, are only expected to see a 2% contraction. Starts on road construction, on the other hand, are forecasted to grow 7%.
The news gets better as we look beyond 2025, though. The 2026 – 2029 forecast for the West includes growths of 5% in Power Infrastructure starts, 6.4% for dams and canals, as well as 7.7% for all other Civil work.
Educational Construction Hits Low Point in West Region
2025 represents a low-point in the 5-year Educational construction outlook for the West region. With $16.9 billion in forecasted spending for this year, the West is facing 17.8% drop from 2024 levels.
Between 2026 and 2029, spending is expected to grow by 3.2% on a compounded annual basis. In the coming years, College and University spending growth at 8.2% CAGR (compound annual growth rate) is expected to be many times faster than that for K-12, spending, which is anticipated at 1.1%.
Industrial Construction Also Hits Low Point in the West, but Spending Expected to Grow
Industrial construction continues its sharp correction in the West region, with a projected 26% decrease in spending. That drop brings $34.2 billion in spending in 2024, all the way down to an expected $9.6 billion in 2025. As with other segments of the construction industry, Industrial spending in 2025 is expected to mark a low-point in spending. In contrast, growth between 2026 and 2029 is expected to resume with a CAGR of 6.1%
Medical Spending in the West Falls in Line with National Forecast
Medical construction in the West region is expected to fall by 20.3% to $7.5 billion, which is not too far off from ConstructConnect’s national forecast of an 18.6% decrease.
Like the Rest of the US, the West Coast Faces Stagnant Multi-Family Construction Spending
Multi-family Residential construction offers minimal relief, projected to remain essentially flat with a 0.5% decline from 2024. That results in $22.7 billion in spending. While not an exciting performance, it still outperforms the national forecast of a 3.9% contraction.
A combination of high prices and high financing costs will continue to put downward pressure on Multi-Family demand in the West, along with the rest of the nation, until sometime in 2026.
Overall Q2 2025 Outlook for the West
The West’s forecasted construction performance aligns with ConstructConnect’s observation that a weakening economic environment is driving downgrades across the construction industry. Looking on the bright side, however, the significant growth in Commercial construction provides limited relief to an otherwise challenging outlook.
