Persistent challenges like permitting delays, utility bottlenecks, price volatility, and tariffs continue to impact construction delivery timelines—but now, labor shortages are emerging as a key driver of project delays, according to DPR Construction’s Q2 2025 Market Conditions Report.
The Associated Builders and Contractors (ABC) projected a deficit of approximately 546,000 construction workers in 2025. While job openings have declined slightly in recent months, the industry continues to face widespread labor constraints, increasing the need for faster, smarter project execution.
“Volatility has become the norm, not the exception,” said Tim Jed, DPR’s Supply Chain Leader. “Labor availability, material lead times, and regulatory hurdles are converging into a perfect storm. The customers weathering it best are planning early, pressure-testing strategies, and partnering with teams prepared to respond to rapidly shifting conditions.”
Navigating Ongoing Uncertainty
Construction teams are adapting in real time, balancing limited resources with rising demand and tighter delivery schedules. DPR’s latest report highlights how early planning, data-driven decision-making, and strategic alignment are helping teams deliver projects on time and within budget.
To address labor challenges specifically, DPR is accelerating the use of prefabrication and leveraging its Self-Perform Work (SPW) teams—approaches that provide greater control over scope, sequencing, and schedule.
Sector-Specific Trends
The Q2 report outlines how market pressures are impacting several major sectors:
- Life Sciences: A surge in large, complex projects is creating fierce competition for specialized trades, particularly in manufacturing. DPR is addressing this through regional and national trade sourcing, prefabrication to reduce field labor, and SPW to bridge workforce gaps.
- Healthcare: Systems are facing layered challenges, from workforce shortages and shifting patient needs to increased operational risk. DPR supports healthcare clients with real-time data, early alignment with stakeholders, and prefabrication to streamline delivery and reduce risk.
- Commercial: In growth markets such as Texas, Arizona, and the Southeast, developers are under pressure to meet aggressive timelines while contending with inflation and labor shortages. DPR supports smarter proforma development through early cost modeling, supply chain engagement, and SPW.
- Higher Education: Universities are managing uncertainty tied to fluctuating material costs, regulatory changes, and enrollment trends. Many are focusing on renovations and cost containment. DPR brings predictability with early logistics planning and schedule strategies tailored to campus construction windows.
- Advanced Technology: High demand for data centers and manufacturing facilities is being driven by AI expansion, electrification, and reshoring. However, workforce shortages in remote areas, long utility lead times, and permitting delays present hurdles. DPR mitigates these risks through early agency coordination, trade alignment, and data-informed planning, including prefab strategies.
Tracking Tariffs and Supply Chain Shifts
The report also provides insights into tariff impacts and supplier complexity, tracking over 4,000 material-related updates since January.
Explore the full Q2 2025 report and interactive dashboard at www.dpr.com/market-conditions.
