Nonresidential Building Construction Market

Buildings worldwide enclosed 273 billion square metres of floor area in 2024, and residential space made up 77% of it, so roughly 62.8 billion square metres is shops, plants, offices, schools, hospitals and hotels. The Nonresidential Building Construction Market covers the new build, extension and deep retrofit of that non-housing floor area, paid to general contractors and their trades. Our receipt: 1.61 billion square metres of floor-area-equivalent work at an average USD 1,946 per square metre equals USD 3.14 trillion (USD 3137.00 billion) in 2025, rising to USD 4.66 trillion by 2035 at a 4.04% revenue CAGR. The pace of retrofit is set partly in Brussels: the recast Energy Performance of Buildings Directive (EPBD), (EU) 2024/1275, entered into force on 28 May 2024. The study belongs to our construction materials coverage and is built with the Douglas Insights research methodology.

What powers nonresidential building construction demand, from data halls to hospital wings?

Four forces add 2.21 points of gross floor-area growth a year to nonresidential building construction: data halls and high-tech plants, EU-mandated retrofit, healthcare and school capacity, and Asian factory build-out. Restraints then remove 0.56 points, leaving the 1.65% volume leg that drives the 2035 figure across all five regions.

Data halls and high-tech plants contribute 0.71 points, the largest share. HOCHTIEF, whose Turner unit it calls the largest construction manager in the United States, reports EUR 16.8 billion of artificial intelligence (AI), digital and tech work, 21% of a record EUR 72.5 billion backlog at the end of 2025. Douglas Insights counts office and data centre buildings at USD 562 billion in 2025, the fastest-growing building type at 5.86% a year. Data halls carry far more structure, power and cooling per square metre than a speculative office, so every hall added lifts both volume and the blended price. Douglas Insights values the data hall contribution at about USD 22.3 billion of extra nonresidential building work in 2026 alone, nearly as large as the whole US lodging line of USD 24.1 billion.

Mandated retrofit of the existing stock adds 0.52 points. Under the recast EPBD, minimum energy performance standards (MEPS) must trigger renovation of the 16% worst-performing nonresidential buildings by 2030 and the 26% worst by 2033. Member states had to transpose the text this year, which moves the targets from policy papers into tender documents. Each renovated office or school counts in our ledger as floor-area-equivalent work at new-build cost.

Healthcare and education capacity adds 0.38 points. In the Census Bureau’s latest annual series, US health care building spending held at USD 69.1 billion and educational building at USD 138 billion, two lines that barely move with the business cycle. Ageing populations need clinic and ward space regardless of interest rates, which makes this the steadiest of the four drivers.

Asian factory and logistics build-out supplies the final 0.60 points. Larsen and Toubro closed its latest fiscal year with a record order book of INR 740,327 crore and named data centre, hospital and manufacturing facility work among its building jobs. China’s secondary-industry investment grew 2.5% while its total fixed asset investment fell 3.9%, so factory floor area kept rising even as property shrank. Together the four drivers sum to 2.21 points before restraints: 0.71 from data halls, 0.60 from Asian factories, 0.52 from retrofit and 0.38 from healthcare and schools. The ranking matters for suppliers, because the two largest drivers favour steel frames, raised floors and process services over the masonry and timber of smaller civic buildings.

Which headwinds slow nonresidential building construction on site, in finance and in supply?

Three headwinds remove 0.56 points a year from nonresidential building construction volume: skilled labour scarcity takes 0.27, weak office and retail property finance takes 0.17, and higher structural steel duties take 0.12. Net of these, floor-area-equivalent work grows 1.65% a year to 1.90 billion square metres by 2035.

Labour is the heaviest drag at 0.27 points. Hands are short. A 99-city survey by cost consultant Turner and Townsend found skilled labour shortages in 72% of regions and average United States construction wages of USD 76 an hour, reaching USD 131.40 in New York. Contractors cannot staff every awarded job, so schedules stretch and annual floor area put in place lags orders.

Property finance removes 0.17 points. China’s National Bureau of Statistics (NBS) reported that real estate development investment fell 17.2% in 2025 to CNY 8,278.8 billion, and US commercial building spending dropped 7.8% to USD 122 billion. Shopping centres and speculative offices depend on lenders and pre-lets, and both remain scarce outside prime districts.

Steel duties remove 0.12 points. Frames cost more. A presidential proclamation raised US duties on steel and aluminium articles and derivatives from 25% to 50% from 4 June 2025, which lifts the price of frames, decking and curtain wall. Some owners respond by trimming floor area or deferring phases, a volume effect we count separately from price.

Which building type leads nonresidential construction value: factories, shops or data halls?

Industrial and manufacturing buildings lead with 27.4% of nonresidential building construction, or USD 860 billion in 2025, because plant shells, cleanrooms and process halls carry heavy structure. Office and data centre buildings grow fastest at 5.86% a year as AI capacity is built across North America, Europe and Asia.

Industrial and manufacturing buildings hold USD 860 billion because Chinese, Indian and US factory programmes run at a scale no other building type matches. Commercial and warehousing buildings take USD 681 billion, a share that slipped as US shop and warehouse spending fell last year. Office and data centre buildings carry USD 562 billion and reach USD 992 billion by 2035, the fastest at 5.86%, because data halls are priced well above standard offices. Educational buildings account for USD 458 billion, anchored by public school budgets. Healthcare buildings deliver USD 323 billion and grow 4.71% on demographic need. Hospitality, leisure and other buildings make up USD 254 billion, covering hotels, arenas, churches and public safety premises.

Retrofit work sits inside every row. Nothing is exempt. Concrete frames and envelopes for these buildings draw on the products tracked in our Cement Market and Facade Market studies, which explains why the building-type split matters to material suppliers.

Which region holds the largest nonresidential building construction spend?

Asia Pacific holds the largest nonresidential building construction spend at USD 1.25 trillion in 2025, 39.8% of the global total, on Chinese and Indian factory, school and hospital volume. The Middle East and Africa grows fastest at 5.62% a year, while Europe trails at 2.86% as new floor area gives way to retrofit.

Asia Pacific reaches USD 1.95 trillion by 2035 at 4.58%, even though China’s non-residential property investment, which our NBS-derived count puts at CNY 1,927.4 billion, kept falling. North America stands at USD 862 billion, and the US Census Bureau’s 2025 annual series, released on 27 February 2026, puts the nine US building categories we count at USD 748 billion of a USD 1.25 trillion nonresidential total. North America grows 3.71% to USD 1.24 trillion. Europe holds USD 689 billion and grows 2.86% to USD 913 billion, with construction output flat in the euro area in 2025. The Middle East and Africa holds USD 217 billion and reaches USD 375 billion, the fastest at 5.62%, as hotel and hospital floor area is added from a small base. Douglas Insights expects the Middle East and Africa to add USD 158 billion of annual building work by 2035. Latin America is the wildcard at USD 121 billion: nearshored factory shells could lift its 3.98% path well above our base.

Which contractors and companies dominate nonresidential building construction?

No contractor holds more than 5% of nonresidential building construction. Douglas Insights estimates China State Construction Engineering Corporation (CSCEC) at 4.6% of 2025 value and the top three, adding HOCHTIEF and VINCI, at 7.1%, based on disclosed building revenue and contract filings from each group.

CSCEC’s lead rests on sheer domestic building volume: housing contracts of CNY 1.63 trillion in the first seven months of 2025, a figure that mixes apartments with public buildings. VINCI reported on 5 February 2026 revenue of EUR 74.6 billion, with VINCI Construction at EUR 32.1 billion and VINCI Energies, which wires and fits out buildings, at EUR 21.6 billion. Skanska posted SEK 179.3 billion of 2025 revenue and a 4.1% construction operating margin. Bouygues Construction booked EUR 10.6 billion with a EUR 17.5 billion backlog. Larsen and Toubro grew order inflow 22% to INR 435,590 crore. HOCHTIEF, through Turner, holds the strongest data hall position after its 2025 order surge.

How much does a square metre of nonresidential floor space cost to build in 2025?

Nonresidential building construction realises USD 1,946 per square metre on our global blend in 2025, inside a band from about USD 723 in the cheapest Asian manufacturing hubs to USD 5,744 in New York. Labour, not materials, now sets most of the gap between the cheapest and dearest cities.

The Turner and Townsend city survey puts New York at USD 5,744 per square metre, San Francisco at USD 5,504 and London at USD 5,385, against USD 723 to USD 1,168 in Vietnam, India and Malaysia. The same survey forecast construction cost inflation of 3.8% and then 4.0% a year. Our price leg is lower, at 2.35% a year, because mix shifts towards Asian floor area pull the blended figure down even as each city gets dearer. Data halls price above every band here. A tilt-up warehouse sits near the floor.

Regional blends run from USD 1,093 per square metre in Latin America to USD 3,184 in North America. Europe averages USD 2,614, Asia Pacific USD 1,520 and the Middle East and Africa USD 1,486.

Which energy performance rules govern new and renovated nonresidential buildings?

The recast EPBD sets the strictest rules for nonresidential buildings: zero-emission design as the standard for new buildings, solar-ready roofs, and MEPS forcing renovation of the worst 16% of nonresidential stock by 2030. Europe’s USD 689 billion of building work is now shaped as much by compliance as by demand.

The European Commission notes that around 40% of EU energy is used in buildings, which is why the directive targets the stock rather than only new floor area. The 26% renovation threshold for 2033 roughly doubles the rate at which owners must strip and re-clad offices, schools and hospitals. In the United States, rules come through state energy codes and local building performance laws rather than a single federal text, so compliance work is uneven by city. For glazing-heavy offices, the Aluminum Curtain Wall Market study tracks how envelope rules change product choice.

What share of nonresidential building construction is retrofit of existing floor area?

Douglas Insights puts retrofit and deep renovation at 36.4% of nonresidential building construction value in 2025, or USD 1.14 trillion, against 63.6% for new build and extensions. Europe’s share is highest, near half, because the EPBD pushes owners to upgrade existing schools, offices and hospitals rather than build anew.

New floor area is shrinking as a share. Stock wins. GlobalABC data show total floor area grew only 1.7% in its latest year, and in a stock of 62.8 billion nonresidential square metres that leaves most annual work on existing buildings. Retrofit jobs swap structure for services: heating, ventilation and air conditioning (HVAC), heat pumps, glazing and controls take most of each budget. Our ledger converts renovated area to new-build equivalent at about 0.6 square metres per square metre treated.

How thin are general-contractor margins on nonresidential building contracts?

General-contractor margins on nonresidential building contracts run near 4%: Skanska earned a record 4.1% construction operating margin in its latest full year on SEK 179.3 billion of group revenue. Margins are thin. They mean labour or steel surprises of a few points can erase a job’s profit.

Contractors protect those margins with construction management and cost-plus formats that pass labour and material swings to owners. Backlog quality matters more than size. Mix decides. HOCHTIEF’s EUR 72.5 billion backlog grew 18% on a comparable basis, while Bouygues Construction’s EUR 17.5 billion fell 4%, a split that mirrors data hall exposure.

What did the Census Bureau’s 2025 count show for US office, factory and school buildings?

US manufacturing building spending fell 6.5% last year to USD 220 billion, while office building, which includes data halls, rose 1.9% to USD 106 billion. Across nine building categories, the nonresidential building construction we count in the United States reached USD 748 billion, slightly below the prior year.

Total US nonresidential spending, including highways and power, was USD 1.25 trillion, down 0.6%. Public nonresidential rose to USD 505 billion while private nonresidential fell to USD 742 billion, a split that shows public schools and clinics cushioning weak private demand. Amusement and recreation rose 5.5% to USD 43.2 billion and lodging slipped 0.9% to USD 24.1 billion.

What if data hall orders stall: how far apart are the nonresidential building scenarios for 2035?

Our nonresidential building construction scenarios span USD 4.12 trillion to USD 5.27 trillion in 2035 around a USD 4.66 trillion base. The slower case cuts volume growth to 0.85% and price to 1.90%; the faster case lifts them to 2.45% and 2.80% as AI campuses and EPBD retrofit both accelerate.

The base case pairs 1.65% volume with 2.35% price. A data hall pause with weak China property produces the slower USD 4.12 trillion, while full transposition of the EPBD that entered into force on 28 May 2024 and continued AI capital spending give the faster USD 5.27 trillion. Moving volume growth up one point gives USD 5.14 trillion; moving it down one point gives USD 4.22 trillion, a swing of about USD 459 billion per point. Our 4.04% falls in the lower half of the 3.3% to 8.7% spread in published forecasts, because we count floor area, not contract awards.

Douglas Exclusive: the Nonresidential Floor-Area Ledger

The Nonresidential Floor-Area Ledger is a Douglas Insights model, not an official register. It is built from 18 inputs: 9 US Census building categories, 6 contractor disclosures and 3 published datasets (GlobalABC floor area, Turner and Townsend city costs and NBS China investment). It records, for each region, how many square metres of floor-area-equivalent work were put in place and at what blended price.

The ledger’s main finding is a value and volume mismatch. Asia Pacific carries 51.0% of floor-area-equivalent work but only 39.8% of value, while North America delivers 16.8% of the area and 27.5% of value. A square metre in North America earns contractors 2.1 times the Asian blend. Growth in Asian floor area therefore lifts volume faster than revenue, which explains why our price leg sits below city cost inflation.

Which receipts and methodology checks sit under the nonresidential floor-area model?

Our model covers five regions, multiplying 1.61 billion square metres of floor-area-equivalent work by USD 1,946 per square metre to reach USD 3.14 trillion in 2025. Volume grows 1.65% and price 2.35% a year, compounding to 4.04% and USD 4.66 trillion in 2035.

Cross-check one: the nine US Census building categories sum to USD 748 billion, 86.8% of our USD 862 billion North America figure, with Canada and Mexico supplying the rest. Cross-check two: 1.7% growth on 273 billion square metres, at the 23% nonresidential share, implies about 1.07 billion square metres of new floor area a year, against our new-build portion of 1.03 billion square metres, a 3.9% gap. Cross-check three: our 2025 total sits 1.6% above the lowest published 2025 estimate we read. Volume reaches 1.90 billion square metres in 2035 and the price per square metre reaches USD 2,455.

Sources

1. US Census Bureau Construction Spending, December 2025 and annual 2025 (2026)
2. European Commission Energy Performance of Buildings Directive (2024)
3. National Bureau of Statistics of China Statistical Communique on 2025 National Economic and Social Development (2026)
4. Eurostat Production in construction, December 2025 (2026)
5. The White House Adjusting Imports of Aluminum and Steel into the United States (2025)
6. GlobalABC / UNEP Global Status Report for Buildings and Construction, key messages (2026)
7. HOCHTIEF HOCHTIEF 2025 results (2026)
8. VINCI VINCI full year 2025 press release (2026)
9. Bouygues Bouygues FY2025 results presentation (2026)
10. Larsen and Toubro L&T financial results FY2025-26 (2026)