At the Associated Construction Contractors of New Jersey (ACCNJ) Fall 2025 Convention, Otteau Group Managing Partner and Chief Economist Jeff Otteau delivered an encouraging—but nuanced—forecast for the state’s construction industry. With total spending set to exceed $16 billion in 2025, New Jersey continues to outpace national trends and attract investment across infrastructure, multifamily development, commercial renovation, and public-sector work.
Lower interest rates are already stimulating new project starts, and a decline in inflation—reinforced by falling oil prices—signals an economic environment that is finally stabilizing after several turbulent years. According to Otteau, as borrowing costs ease, construction spending typically accelerates even faster than the broader economy, positioning the Garden State for a period of sustained growth.
But alongside this positive momentum lie meaningful challenges. Labor shortages remain one of the sector’s most pressing concerns, intensified by an aging workforce, fewer young tradespeople entering the field, and a heavy reliance on undocumented labor. Wage inflation is expected to intensify as contractors compete for skilled employees.
Material costs also pose headwinds. Tariff-driven price increases and renewed construction inflation—4.2% in North Jersey and 3.5% in South Jersey—are squeezing budgets at a time when both public and private owners are pushing aggressive timelines.
Despite these constraints, the ACCNJ outlook underscores how critical construction remains to New Jersey’s broader economic health. The sector generates some of the largest multiplier effects of any industry, driving job creation, tax revenue, and long-term community development. And with more than $140 billion in planned future projects statewide, New Jersey’s pipeline signals steady demand for construction services well into the next decade.
These trends reflect what Mandelbaum Barrett PC’s Construction Law Group is seeing across its client base: a strengthening market cycle paired with increased pressure on costs, labor strategy, and project delivery planning.
For a full breakdown of Otteau’s insights, read NJBIZ’s coverage of the Fall 2025 Economic Outlook here.