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As construction leaders look ahead to the rest of 2025, one question dominates: Will this be a profitable year?

The short answer is yes. New construction in Oregon is moving forward, and while material costs remain somewhat unpredictable, easing inflation and declining interest rates suggest a busier year than 2024 — pointing to increased profits across the industry.

But a full answer is more nuanced. Construction firms must prepare for a range of complex challenges and find innovative solutions to protect their margins and support long-term growth.

Weather risks are rising

Challenge: Catastrophic weather events are becoming more frequent, and working conditions are growing more dangerous — particularly for outdoor labor. Extreme heat is now a leading cause of jobsite fatalities. Younger workers in particular are less willing to take on roles that expose them to these risks, and shifting work schedules to avoid peak heat can stretch out project timelines.

Solution: Many firms are investing in modular construction, which offers safer, controlled environments for laborers. This also can position firms to compete for mega-projects — those with values greater than $1 billion, which are becoming more common.

Meanwhile, risk management has never been more critical. When traditional insurance becomes costly or unavailable, forward-thinking firms are turning to creative options such as parametric insurance or project-specific policies to fill coverage gaps.

Lack of skilled labor persists

Challenge: The workforce shortage continues to weigh heavily on the industry. According to the U.S. Bureau of Labor Statistics, one in five construction workers is over the age of 55 and nearing retirement. Unfortunately, younger generations — millennials and Gen Z — are not entering the trades in large enough numbers to replace them.

Solution: Construction firms are increasingly leveraging personalized employee benefits to recruit and retain talent. Nearly half of construction leaders acknowledge dissatisfaction with their current benefits offerings, according to a HUB survey. With the right data analytics, employers can tailor benefits packages to what workers truly value — such as mental health support, child care, and financial wellness programs — ultimately boosting engagement and productivity.

Tech adoption brings new exposures

Challenge: Technology adoption is accelerating across construction, from AI and telematics to automation and digital project management. While tech boosts productivity and safety, it also introduces new risks — especially around cybersecurity.

Solution: Once a firm starts using connected technologies, cyber preparedness becomes essential. Cyber insurers now expect companies to adopt best practices: strong password policies, multifactor authentication, regular employee training, and an up-to-date cyber incident response plan. Firms that proactively manage cyber risk will be in a far better position to qualify for coverage and minimize disruption when threats arise.

Fleet telematics: tech that pays off

Challenge: Firms are looking to boost operational efficiency, reduce claims, and unlock better insurance options.

Solution: Companies that invest in telematics are not only improving safety but also seeing long-term cost benefits. Insurance carriers are recognizing the value of telematics and, in many cases, offering preferred pricing or enhanced coverage terms for firms with these systems in place. With data to back up safety improvements, underwriters are more confident in the risk profile of a telematics-equipped fleet.

One of the biggest benefits? Claims defense. When an accident occurs, forward-facing dashcams provide objective evidence that can either exonerate a driver or settle disputes quickly — saving time, money, and reputation.

Fleet telematics is quickly becoming a must-have for construction firms that manage vehicles or heavy equipment. Forward-facing cameras, GPS tracking, and performance analytics offer real-time insights that can drastically improve driver behavior, reduce accident frequency, and streamline claims management.

Final word: Don’t navigate alone

Above all, find a broker specializing in the construction industry to guide the organization through the challenges of 2025. Not only can a broker help evaluate the adequacy of various insurance coverages, but they can also help determine whether risk management resources are sufficient for supporting business goals. Finally, an expert will understand the risks and know how to find creative ways to navigate the path toward success.

Logan Haugen is senior vice president of commercial insurance at Hub International Oregon – a global insurance brokerage. He specializes in commercial lines property and casualty insurance. Contact him at 541-687-1117 or [email protected].

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91ÊÓƵ guarantees the accuracy or completeness of any information published herein.