Construction costs and market fluctuations are combining to create a market picture of surface stability with uncertain undercurrents.
According to the Rider Levett Bucknall Q3 2025 Quarterly Construction Cost Report, the U.S. Department of Commerce reported construction put in place in July was estimated at $2.14T. While healthy, that total was 0.1% less than the revised June estimate and 2.8% less than the July 2024 revised estimate of $2.20B.
In terms of general market data, the U.S. Gross Domestic Product saw a percent change of 3% over the quarter, after having fallen 0.5% in Q2. The Consumer Price Index rose slightly to 322.6, having started the quarter at around 320.
After a strong rebound in May, the Architectural Billings Index fell slightly in both June and July, settling at around 47.
While national unemployment edged up slightly in Q2 to slightly more than 4%, construction unemployment dropped, falling from around 5.5% in Q1 down to roughly 3.8% in Q2.
Las Vegas vs. Other Markets
RLB tracks annual percent changes in construction costs on a quarterly basis for 17 markets around the U.S.
For Q3, Las Vegas saw the third-largest gain, rising 4.85%.
Chicago saw the greatest gain at 5.41, followed closely by Honolulu at 5.40. New York was near the bottom with a gain of 3.74%, with the bottom two reported as Minneapolis at 3.5% and Austin at 2.36%.
Market Trends
In his commentary introducing the report, RLB President for North America Paul Brussow said of the currently complex state of affairs, “While national averages point to moderation, local dynamics—from labor shortages to mega-project demand—are reshaping the landscape in ways owners can’t afford to ignore.”
He noted expected rate cuts from the Federal Reserve should encourage lenders to put more money in the field, freeing momentum for stalled projects across the country. Brussow also expressed optimism because valuations have remained strong, indicating owners have kept their confidence in construction’s fundamentals.
“For owners,” he said, “this is more than a headline; it’s a call to examine whether strategic partnerships, recapitalization, or joint ventures might unlock new avenues of growth, innovation, or resilience.”
Brussow expressed caution regarding the ongoing labor shortage and current market and social conditions. He stressed owners need to invest in workforce development and targeted training to increase both the supply and quality of the workforce.
He also highlighted the current uncertainty economic policy has introduced and expanded, focusing particularly on tariffs, supply chain disruptions and “shifting labor dynamics,” all of which “contribute to cost swings that static budgets cannot absorb.”
Brussow cautioned, “Owners who continue to rely on fixed assumptions risk exposure. Instead, cost certainty comes from flexibility: rolling forecasts, scenario planning, and early procurement strategies.” His recommendations for future-proofing construction efforts included:
- Treating budgets as dynamic guiding instruments rather than static plans,
- Applying consistent delivery standards across projects and
- Linking sustainability and technology decisions to long-term returns.
