INFRASTRUCTURE SPENDING FUELS GROWTH
One of the primary drivers of construction activity in 2025 is increased infrastructure funding. According to Construction Equipment’s 2025 Annual Report & Forecast, a net 35% of industry respondents anticipate revenue growth, largely due to investments in transportation, water systems and other infrastructure projects.
This trend aligns with expectations that declining interest rates and easing inflation may reduce project financing costs. Deloitte’s 2025 Engineering and Construction Industry Outlook highlights that these economic conditions could encourage both public and private sector investments, boosting demand for construction equipment leasing and financing.
MARKET UNCERTAINTIES AND CHALLENGES
Despite these growth indicators, some industry leaders remain cautious. Volvo, for example, projected a flat market for 2025, citing macroeconomic uncertainties and cooling demand. In Q3/24, Caterpillar reported a 4% decrease in sales and revenues. This decline was attributed to reduced demand in the construction and resource industries, signaling potential softness in equipment demand in
the coming months.
Additionally, the home building sector faces headwinds such as rising land prices, increased material costs and a more competitive selling environment. MarketWatch reported that analysts have adjusted their outlook for major home builders, reflecting a more cautious perspective on residential construction activity in 2025.
Another concern for the industry is the potential impact of the Trump administration’s deportation policies. With a significant portion of the construction workforce composed of undocumented immigrants, stricter immigration enforcement could lead to labor shortages, project delays and increased costs.
OPPORTUNITIES IN EQUIPMENT FINANCING
Despite uncertainties, the construction equipment finance market is poised for significant growth. In North America, Research Nester reports that the market is expected to expand rapidly between 2025 and 2037, driven by increased demand for construction machinery in both residential and commercial sectors. This growth presents substantial opportunities for equipment financiers to support the industry’s evolving needs. •
