Urgent Update: Pennsylvania Construction Industry Faces Major Slowdown

UPDATE: The Pennsylvania construction industry is experiencing a significant slowdown, with reports of declining business for contractors like Greg Harris, owner of G.P. Harris Construction, Inc.. In Jonestown, Lebanon County, Harris notes that customer inquiries for major home remodeling projects have sharply dropped, reflecting a nationwide trend in construction spending.

According to Harris, “Through 2023 we were extremely busy, and then it just seemed to be [people] lost the confidence to spend large amounts of money.” This downturn is alarming, as it coincides with rising housing prices, which reached a median of $299,900 in September, a 3.4% increase compared to the previous year, according to the Association of Pennsylvania Realtors.

Nationally, the situation is dire. The Associated General Contractors of America reports that fewer than half of the nation’s metro areas added construction jobs between August 2024 and August 2025. Chief economist Ken Simonson stated, “Construction employment has stalled or retreated in more and more areas as owners pull back on projects in the face of higher costs.”

Contractors in central Pennsylvania are attributing the slowdown to a mix of factors, including high interest rates, soaring material costs, and persistent inflation. For Brian Miller, a designer at EXCEL Remodeling in Lemoyne, the company’s usual backlog of eight to ten weeks has dwindled. “It’s been challenging, to say the least… We’re not hurting, but we are definitely behind from what we were last year,” Miller said.

Harris, who is also the incoming president of the Pennsylvania Builders Association, emphasizes that the regulatory environment is hindering progress. He notes that the permit process varies across municipalities, resulting in delays. “It just feels like a very prolonged, extended process on projects getting started,” said Mike Klinepeter, president of Pyramid Construction.

The economic climate is affecting homeowner decisions. Many are hesitant to invest in home improvements due to uncertainty, exacerbated by rising costs. Harris points out that prices for materials and labor have surged by 18% year-over-year, with tariffs on imported materials inflating expenses further.

The recent 0.25% interest rate cut by the U.S. Federal Reserve offers a glimmer of hope, but Harris warns that many customers are postponing projects. “They started putting bigger and more ambitious projects on hold,” he said.

Looking ahead, uncertainty looms. Klinepeter predicts that 2026 will begin similarly to 2025, with ongoing challenges from the federal government and state budget issues that could result in more construction delays. However, both Klinepeter and Harris remain optimistic about a future rebound in the market.

As the construction industry grapples with these pressing issues, homeowners and contractors alike are left wondering how long this downturn will last and how it will shape the future of building in Pennsylvania. For now, the focus remains on navigating this complex landscape of rising costs and economic uncertainty.