How the New Administration May Impact the Construction Industry

Construction is among the industries most impacted by any new presidential administration. As the construction industry prepares for a new Trump administration, several industry trends are likely to continue on their trajectory, including strong demand for data center construction and semiconductor manufacturing projects. As far as changing trends and anticipated new initiatives, below are the key ways we think the new administration’s positions could impact construction-related businesses.

Deregulation

Trump’s pro-business bent will likely mean reduced regulations and streamlined permitting processes for new construction, making it easier and faster to start large projects. Trump has also supported energy policy that favors fossil fuels, and is likely to put reduced focus on renewable energy projects. He has advocated for defunding the Inflation Reduction Act, which in part addresses greenhouse gas emissions but also provides tax credits for green energy projects.[1]

Infrastructure Investments That Favor Private Sector–Driven, Traditional Projects

Trump’s infrastructure policies favor private sector–driven projects and public-private partnerships (PPPs), as well as more traditional projects such as roads, bridges, power plants, and industrial and fossil fuel facilities. Based on his campaign statements, Trump may seek to defund Biden administration infrastructure programs like the 2021 Infrastructure Investment and Jobs Act ("ILJA"), which authorized $1.2 trillion for construction projects and other investments over a five-year period.

Proposed Tariffs Could Result in Near-Term Increases for Raw Material Costs

The domestic construction industry relies significantly on imported wood, iron, and steel.[2] Lumber imports, for instance, are expected to continue rising to 16.1 billion board feet in 2025.[3] These imported materials could be subject to Trump’s "America First" economic policy, which includes a proposed 10-20% across-the-board tariff on imports.[4] He has floated a separate 60% tariff on goods from China as well.

Immigration Policies Could Impact Labor Costs

Trump’s stricter immigration policies could impact the availability of labor in the construction industry, which relies on immigrant workers. While in office the first time, he suspended the H-2B visa program in the midst of the pandemic.[5] He has very publicly advocated for the increased deportation of undocumented workers. Such immigration enforcement measures could lead to labor shortages for portions of the industry.

Overall Impact

A second Trump term will likely mean less regulation, emphasis on the private sector, and more funding for and focus on traditional infrastructure and energy projects. It could also mean reduced focus on renewable energy projects, potential labor impacts due to stricter immigration policies, and potentially near-term higher costs associated with tariffs on imported goods.

We Can Help

Please contact Maslon’s Construction & Real Estate Litigation Group if you have questions regarding legal implications of the election for the construction industry.