The construction industry's performance in 2025 was a 'tale of two halves,' with a strong start driven by infrastructure and industrial investment eventually fading due to significant headwinds and a cooling economy, according to Hearn & Hearn Consulting. The firm noted that the initial half of the year saw strong expansion in construction output, supported by government projects and private sector spending, as reported by BusinessWorld.
However, the second half of the year experienced a marked slowdown as economic conditions deteriorated. Factors such as rising interest rates, inflation, and reduced government spending contributed to the decline. Hearn & Hearn indicated that the momentum from early 2025 could not be sustained, leading to a contraction in the latter part of the year.
Looking ahead, the consulting firm expects the construction sector to face continued challenges in 2026, with recovery hinging on renewed infrastructure spending and improved economic stability. The industry's performance underscores the Philippine economy's vulnerability to external and domestic pressures.