How ‘One Big Beautiful Bill May Reshape Construction, and Why Timing Now Matters

“One Big Beautiful Bill” (OBBB) is expected to be a net positive for the construction landscape, driving capital investment across manufacturing, infrastructure, and energy sectors. With generous tax incentives and domestic production goals, the legislation is set to accelerate development, but it may also magnify the industry’s long-standing challenges around workforce and supply availability.

For construction firms, success will depend on how quickly and strategically they can act.

Key provisions fueling new momentum

Unlike previous legislation that focused narrowly on clean energy, OBBB casts a broader net, providing incentives that directly improve liquidity, reduce tax friction, and encourage modernization across a wide range of industries.

For construction contractors and developers, several provisions stand out as particularly impactful:

• 100% bonus depreciation (Restored)
  The bill reinstates and makes permanent (for qualifying assets) the ability to deduct the full cost of eligible property placed in service after January 19, 2025. Firms can immediately deduct the cost of new equipment, vehicles, and technology investments, freeing up capital for reinvestment in growth, safety, and innovation.
• Immediate expensing of R&D
  The OBBB reverses the requirement to amortize domestic research & development (R&D) costs and instead allows full expensing for tax years beginning after December 31, 2024. It also allows taxpayers to recover or deduct previously capitalized R&E costs for 2022–2024.
• Permanent 20% Pass-Through Deduction (Section 199A)
  The OBBB makes permanent the pass-through QBI deduction (which had been expiring).  Many construction firms are organized as pass-throughs (S corps, partnerships). Keeping the QBI deduction grants tax certainty, enhances cash flow, and enables reinvestment.
• Section 179 expensing boost             
  The limit for Section 179 deductions is increased (to $2.5 million) and the phase-out threshold (for total investment) is raised (to $4 million), indexed for inflation.

Balancing Bonus Depreciation and Section 179 will allow construction firms to aggressively invest in machinery, heavy equipment, tools, vehicles, etc. because they can recover costs sooner. Improves cash flow and reduces the tax burden in the year of investment.

• Workforce & training incentives
  OBBB expands eligibility for grants and 529 savings plans to include trade and technical vocational training (which includes construction trades) to support workforce development. This can help improve the supply of skilled workers over time  The construction workforce has been declining over the last several years and is a serious concern to the construction industry as a whole.

These provisions improve how firms will plan capital, manage cash, and compete for projects over the next several years.

A rush to build: The clock is already ticking

With 100% bonus depreciation available only through 2028 for projects placed in service by 2031, timing is a critical factor. Developers and contractors aiming to take full advantage of these incentives must move quickly, as firms have already rushed to break ground.

Manufacturing construction, particularly in the automotive, food production, and semiconductor sectors, is expected to lead the charge, as firms accelerate investments in high-tech, U.S.-based production facilities. However, ripple effects will extend across various sectors, including energy generation, defense infrastructure, logistics, and warehousing.

In the short-term, we are expecting to see more urgency to mobilize before provisions begin to phase out. This mobilization refers to securing financing and locking in materials and labor as early as possible.

Projects that act quickly stand to benefit not only from the tax advantages but also from access to critical resources before demand peaks and potential shortages.

Double-edged sword: Increased investment vs labor/material shortages

While OBBB’s structure is designed to drive growth, it may also exacerbate existing industry constraints. The bill’s focus on domestic sourcing, coupled with the reshoring of manufacturing capacity, will likely intensify competition for skilled labor and key building materials, which are already in limited supply.

Contractors already facing tight labor markets could see further wage pressure, while procurement teams may need to navigate volatile material pricing and extended lead times. For some firms, project sequencing and supplier relationships will become as strategically important as tax optimization.

Firms that get ahead of the project acceleration will have a decisive edge. Supplier relationship management, equipment updates, and workforce retention will become critical strategies as the new legislation drives industry performance.

Sector-specific opportunities

OBBB goes beyond traditional commercial or industrial builds. Certain key sectors are expected to benefit from its incentives:

• Defense and federal infrastructure:
  With billions directed toward border security and air traffic control modernization, federal contractors and specialty firms experienced in government compliance will see new opportunities.
• Energy and utilities:
  The bill’s capital-friendly structure supports a mix of traditional and renewable energy projects — including zero-emission nuclear — potentially reviving postponed power generation and transmission work.
• Opportunity zones and revitalization:
  Enhanced incentives for investment in designated opportunity zones may catalyze new residential, mixed-use, and community projects, particularly in regions connected to new manufacturing corridors.

Each of these areas presents different compliance and financing considerations, highlighting the value of proactive planning and specialized guidance.

Turn policy into performance

The legislation represents more than just another round of stimulus, it -reshapes how contractors invest, plan, and deliver projects. For some, it will unlock significant tax savings and operational flexibility. For others, it may present new challenges in balancing growth with resource constraints.

Fill out the form on this page to connect with our Construction Practice to discuss how you can leverage the provisions of OBBB to generate new opportunities and fuel growth.