2025 Blueprint to Bottom Line: a summit for strategic construction leaders

Highlights from the 2025 virtual event

At Baker Tilly’s 2025 Blueprint to Bottom Line: a summit for strategic construction leaders virtual event, industry specialists gathered to discuss the evolving landscape of the construction industry, focusing on the integration of artificial intelligence (AI), economic trends, labor market dynamics and strategic planning for the future.

Leveraging AI in construction

The event kicked off with a dialogue on the transformative impact of AI in the construction sector. AI is revolutionizing back-office operations by expediting manual, labor-intensive processes such as accounts payable. The technological revolution is enhancing project efficiency, decision-making accuracy, workforce safety, risk mitigation, cost savings, and interactions with both customers and employees. The consensus was clear: AI is not just a futuristic concept but a present-day reality driving significant improvements in construction operations.

Economic trends and inflation

The event covered timely economic trends, particularly inflation. Between December 2023 and December 2024, inflation was reported at 2.9%, with core inflation at 2.4%. These figures highlight the broader implications of inflation on American households, including changes in price levels since May 2020. The panelists emphasized the importance of understanding these economic indicators to navigate the financial challenges and opportunities in the construction industry.

Labor market dynamics

This section of the discussion addressed the labor market dynamics and the ongoing labor shortages, particularly the shortage of skilled labor, which remains a critical challenge for the construction industry. The panelists underscored the need for effective training and retention strategies to build a robust workforce.

Financial health of households

The financial health of American households was another key topic. Many households have depleted their pandemic savings and are increasingly relying on credit. This shift has led to higher delinquency rates in auto loans and credit card debt. The industry specialists also discussed the high office vacancy rates in certain parts of the country, driven by changes in work behavior such as remote work. These factors contribute to the challenges faced by the commercial real estate sector, including falling property values and increasing foreclosures.

Impact of high interest rates

High interest rates have significantly impacted the housing market, driving many first-time homebuyers out of the market and leading to a decline in mortgage applications. Economist Dr. Anirban Basu noted that while the demand for single-family homes remains high, the average size of newly constructed homes is shrinking to meet the financial capabilities of buyers. This highlights the importance of adapting to these market conditions to sustain growth in the housing sector.

Challenges in the construction industry

The presentation addressed the high cost of fixing defaulted projects and the increasing difficulty in securing project financing. The cost of fixing defaulted projects has been rising for over a decade, with delay claims, workmanship issues, and rework being significant contributors. The panelists emphasized the need for effective project management and financial planning to mitigate these risks.

Succession planning

Succession planning emerged as a crucial topic, with discussions on various options such as family succession, selling to employees via an Employee Stock Ownership Plan (ESOP), or selling to a strategic buyer. The importance of developing future leaders and ensuring operational continuity was emphasized as key to long-term success.

Backlog and future opportunities

The state of the backlog for construction projects was discussed, with panelists noting strong backlogs but expressing concerns about the timing of project starts. Effective resource management and project selection were highlighted as critical to navigating these uncertainties. Growth opportunities were identified in areas such as data centers, energy projects, and infrastructure, emphasizing the need to stay adaptable and prepared for changes in the economic landscape.