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Overview

Texas remains a national leader in commercial construction. In 2025, the industry is still growing steadily. Federal funding and strong demand are helping the state build more, especially in sectors such as commercial, institutional, and industrial buildings. This growth keeps Texas at the top when it comes to building and infrastructure projects.

Major Projects and Growth Opportunities

Texas has won many big construction contracts in 2025, making up a large share of the nation’s total. New semiconductor plants are a major focus, big tech companies building facilities in the state. Texas is also investing in clean energy and major transportation projects, including plans for high-speed trains. Cities like Houston and Dallas are building new neighborhoods that mix homes, stores, and offices. Hospitals and healthcare centers are also expanding to meet the needs of a growing and aging population.

Sustainability and Infrastructure 

Texas is working to improve reliability and sustainability of infrastructure such as roads and power systems. More money is being spent on making the power grid stronger and more reliable. The state is adding electric car charging stations and planning large projects to support future energy needs. Still, some areas—like energy and water systems—need more work. Harsh storms in recent years have shown the need for stronger, more reliable infrastructure.

Challenges 

Continued labor shortages and rising costs are challenging the construction sector. Demand for skilled workers remains among the highest in the U.S., which has pushed wages above national averages. Material costs are volatile, and recent increases in tariffs have put further pressure on budgets, especially for projects dependent on steel and aluminum. Infrastructure projects—including highways—face persistent cost pressures. Natural disaster risks along the Gulf Coast have heightened concerns around delays and insurance. On top of that, many city and county governments have tight budgets, which means planned projects may be canceled or delayed.

Future Outlook 

Texas’s construction market is likely to grow faster than the national average over the next several years. Technology, clean energy, and advanced infrastructure investments will lead the way. However, labor shortages could lead to project delays, and persistent material cost escalation—particularly for steel-intensive projects—may add further complexity and risk. Power grid constraints may slow some industrial expansions if upgrades are delayed. Nevertheless, the state continues to attract major investments from leading national and global companies thanks to its business environment and growth opportunities. With this strong foundation, Texas developers and contractors should anticipate continued expansion, while preparing carefully for ongoing complexity and pricing volatility. 

WPP Texas CHART_20241118.01

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Project Intelligence — Texas

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