The One Big Beautiful Bill Act, a sweeping piece of legislation, is poised to inject a significant boost into the construction sector, but it also raises critical questions about the industry’s capacity to handle the anticipated surge in activity. Unlike the Inflation Reduction Act, which focused primarily on clean energy, this new bill casts a wider net, offering a suite of incentives designed to stimulate construction investment across various sectors.
At the heart of the bill are provisions that promise to enhance cash flow and encourage investment in new equipment and technologies. The restoration of 100% bonus depreciation, the immediate expensing of research and development costs, and the permanent extension of the 20% pass-through deduction under Section 199A are among the most transformative changes. These measures, according to industry experts, will make it easier for contractors to upgrade to safer, cleaner, and more efficient equipment, a move that is particularly beneficial for small and mid-sized contractors who are often constrained by cash flow and tax predictability.
“This also improves cash flow and makes it easier for contractors to replace aging equipment,” said Deniz Mustafa, senior director of infrastructure finance at Associated General Contractors of America. “In the construction industry, this means it is easier for companies to access equipment that is safer, cleaner and more efficient.”
The bill’s impact is expected to be most pronounced in manufacturing construction, where sectors like automotive, food production, and semiconductors stand to gain significantly. John Robbins, global head of enterprise project management at Turner & Townsend, highlighted that the 100% deduction for new non-residential facilities used for manufacturing could stimulate a wave of new construction projects. “I believe this will stimulate activity and investment with construction of new high-tech manufacturing. These tax enhancements should be very attractive and help greenlight shovels in the ground throughout the country,” said Robbins.
Beyond manufacturing, the bill is set to benefit defense-related construction, air traffic control improvements, and traditional energy production. Nearly $50 billion has been earmarked for border security construction, which could drive demand for firms specializing in civil and federal work. Additionally, the bill’s provisions for electric production, including zero-emission nuclear power, could see a resurgence in construction activity, potentially advancing projects that have been delayed or underfunded.
Yet, as the industry braces for this influx of activity, concerns about labor and supply chain pressures are mounting. Joseph Molloy, tax partner at Anchin, warned that the bill’s emphasis on domestic sourcing and reshoring could exacerbate existing workforce and supply chain issues. “The bill’s emphasis on domestic sourcing and reshoring may increase demand for U.S.-based construction labor and materials,” said Molloy. “[That’s] potentially intensifying workforce and supply chain pressures.”
The rush to capitalize on the bill’s incentives before they phase out could further strain these resources. For instance, tax credits for energy-efficient buildings expire after 2026, creating a sense of urgency for green developments. This timing could lead to a frenzy of activity as firms race to break ground before the incentives disappear.
“Timing and financing strategy now matter as much as project cost in maximizing the new law’s benefits,” said Robbins.
The bill also includes enhanced incentives for projects in opportunity zones, which could drive more construction in distressed communities. However, the long-term momentum of the construction sector will depend on what comes next. Jeff Urbanchuk, senior vice president at the American Council of Engineering Companies, emphasized the importance of the reauthorization of the Infrastructure Investment and Jobs Act, which is set to expire in September 2026.
“Overall, the Big Beautiful Bill is a step forward for our industry,” said Urbanchuk. “Our attention now goes to what Congress is planning for the reauthorization of the Infrastructure Investment and Jobs Act, which is set to expire in September 2026.”
As the construction industry stands on the precipice of this new era, the challenge will be to balance the opportunities presented by the One Big Beautiful Bill Act with the very real pressures on labor and supply chains. The sector must innovate, adapt, and collaborate to ensure that this wave of investment translates into sustainable growth and resilient infrastructure for the future.