Key Issues Impacting the Construction Industry in 2025

The construction industry faced significant challenges in the year 2024, including inflation, labor shortages, and expectations from consumers. This year, is the construction industry’s condition more or less the same? Better? Worse? Here’s an overview of the Association of Professional Builders’ key findings considering key issues faced by construction companies in 2025.

Key points:

• Systemized processes and technology drive profitability
• Neglect of content marketing and digital tools limits growth
• Lack of financial literacy undermines business sustainability

Systemized Processes and Technology

The association’s research shows that the use of project management software is on the rise, along with artificial intelligence (AI), used for marketing and communication efforts. “Specialized software is replacing spreadsheets, as builders recognize the efficiency and error reduction it provides,” claims the study. All the way in Australia, a program called Wunderbuild is gaining traction as it captured a 16.2% market share in its first year.

As for AI, the association finds that 37.8% of builders are using the technology for marketing purposes and client communication. “Regardless of company size, builders who leverage AI report improved efficiency in their operations,” (p. 6).

While these tactics seem like an easy way out of managing projects and customer relations, the association emphasizes the importance of training and mentorship as a way to amplify the advantages of software technology. According to the study, builders who invest in training maintain a net profit margin of 6%, while those who don’t stay around 1%. “The message is clear,” says the association, “investment in human capital is as crucial as investment in technology,” (p. 6).

Content Marketing

One major setback found in the association’s study is the lack of content marketing, despite the growing need to make use of the online community. “Despite the clear benefits, many builders underutilize content marketing and digital tools, missing critical opportunities for growth,” (p. 6).

Right now, around 57% of builders are not producing any content to market their projects to consumers. Research shows that builders who release at least two articles per year gain a gross markup of 26%, while those who aren’t producing regular content are around 20%. In the same vein, those who utilize social media, such as Facebook, as a marketing tactic have a higher sales revenue ($4.5m over $2.6m) as well as gross profits (25% over 20%). However, 37% of builders never post on Facebook; 41.5% of US-based builders neglect Instagram as a whole.

Content marketing isn’t just social media and content writing; it’s direct communication with your client base. Adoption of Customer Relationship Management (CRM) systems has increased in the past year, but 52.4% are still neglecting to email their client databases. “This neglect hampers lead nurturing and conversion,” (p. 6).

Although referrals are a key component in reaching new customers, the association found that there is an overreliance on the practice. “Builders whose sales rely on referrals for more than 50% of their revenue find it challenging to mark up jobs effectively,” shows the research. “New home builders mark up jobs by 21.3% compared to 23.3% for those less dependent on referrals,” (p. 7).

Financial Literacy

Unfortunately, there seems to be a gap in financial literacy among builders, leading to “distorted financial reports” and the “risk of paying taxes on unrealized profits”. The association found that, in the past year, only 11.4% of builders understand how to calculate the Work in Progress Accounting Adjustment (WIPAA).

Financial oversight on a monthly basis is heavily needed, even with the increase in monthly financial reports from 2023. After the increase, 41.1% of builders continue to disengage from regular financial oversight. “The inability to understand and manage finances isn’t just a minor shortfall,” warns the association. “It’s a threat to business viability,” (p. 7).

For more information, read the Association of Professional Builders’ full research study or visit our Contact Us page to talk to a professional today.

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