The U.S. construction sector seems to have entered a period of slow expansion in the third quarter of 2025, with growth primarily fueled by infrastructure development, data center construction and utility and power-related projects, while housing and several conventional commercial categories remain subdued.

Demand continues to be anchored by infrastructure and technology-focused initiatives, whereas traditional commercial building and certain parts of the residential market are grappling with financing constraints and softer demand. Companies operating in essential, mission-critical segments are maintaining strong performance, while firms concentrated in discretionary or office-focused sectors are experiencing heightened challenges.

With the help of the Zacks Stock Screener, some of the companies under the broader Construction sector, including MasTec, Inc. (MTZ Quick QuoteMTZ - Free Report) , AAON, Inc. (AAON Quick QuoteAAON - Free Report) , Vulcan Materials Company (VMC Quick QuoteVMC - Free Report) , Johnson Controls International plc (JCI Quick QuoteJCI - Free Report) and EMCOR Group, Inc. (EME Quick QuoteEME - Free Report) are poised to beat on earnings this reporting cycle.

Per the latest Earnings Trends report, the third-quarter earnings season has so far seen releases from approximately 25% of the companies on the S&P 500 Index. Of them, the sector’s total earnings are down 30.4% from the year-ago period on 4.8% lower revenues, with 75% beating earnings per share (EPS) and 50% surpassing revenue estimates.

Factors Influencing Construction Stocks’ Q3 Results

One of the most powerful engines of construction activity is the acceleration of AI-related data center development. Hyperscale operators are racing to expand computational capacity, which fuels not only core building work but also major electrical, power transmission and substation upgrades.

Public investment forms the second major tailwind. Federal infrastructure programs are still converting long-planned transportation, water, and broadband work into on-the-ground construction. Clean energy incentives add another layer, extending growth into renewable power installations, battery plants and electric-vehicle supply chains. All thanks to federal spending through the Infrastructure Investment and Jobs Act, as well as projects tied to the CHIPS Act and Inflation Reduction Act.

Industrial reshoring remains supportive. Even as growth moderates from its earlier surge, companies are still expanding domestic manufacturing and logistics footprints to improve supply-chain resilience. Technology, healthcare and institutional sectors also provide a steady demand floor.

However, considering the challenges, residential construction is expected to have struggled in the third quarter amid elevated borrowing costs, affordability constraints and weak demand, particularly in multifamily. Importantly, labor shortages are expected to have persisted as one of the most significant constraints during the third quarter, with firms continued to report difficulty finding skilled trades, with project schedules affected. Materials and equipment cost escalation will likely remain a drag on margins and new starts, especially where tariffs or supply-chain bottlenecks were present. While price increases have moderated relative to the post-pandemic peaks, they still factor into contractor hesitancy.

Q3 Expectations

The overall estimate picture is a tepid one for the broader Zacks Construction sector amid challenges associated with the soft residential market, high expenses and labor constraints from the year-ago perspective. Per the latest Earnings Trends report, construction sector earnings are expected to decline 13.8% for the third quarter from a year ago. This indicates a wider decrease from the second quarter of 2025’s 10.4% decline. Revenues, however, are projected to grow 1.1%, suggesting an improvement from the 2.5% decline registered in the preceding period.

The Zacks Methodology

Picking the right stock could be difficult unless one knows the proper method. To make the task simple, we rely on the Zacks methodology, combining a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) and a positive Earnings ESP.

Our proprietary methodology, Earnings ESP, shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Research shows that for stocks with this combination of the Zacks Rank and ESP, chances of a positive earnings surprise are as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Winning Stocks

For investors willing to adopt this strategy, we have highlighted five construction stocks that may stand out this earnings season.

MasTec— an infrastructure construction company — topped earnings estimates in all the trailing four quarters, with the average surprise being 25.2%.

MasTec is likely to beat expectations when it reports third-quarter 2025 results on Oct. 30 after the closing bell. This Zacks Rank #3 company has an Earnings ESP of +3.77%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MasTec’s third-quarter EPS is pegged at $2.40, representing growth of 41.7% from the year-ago reported figure (read more: MasTec to Post Q3 Earnings: Buy or Hold the Stock Ahead of Results?).

AAON —  engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment — topped earnings estimates in two of the trailing four quarters and missed on the other two occasions, with the average negative surprise being 4.2%.

AAON is likely to beat expectations when it reports third-quarter 2025 results on Nov. 6, before the opening bell. This Zacks Rank #2 company has an Earnings ESP of +3.50%.

The Zacks Consensus Estimate for AAON’s third-quarter EPS is pegged at 33 cents, representing a decline of 47.6% from the year-ago reported figure.

Vulcan — a construction aggregates producer— topped earnings estimates in two of the trailing four quarters and missed on the other two occasions, with the average being 10.2%.

Vulcan is likely to beat expectations when it reports third-quarter 2025 results on Oct. 30, before market open. This Zacks Rank #2 company has an Earnings ESP of +2.87%.

The Zacks Consensus Estimate for Vulcan’s third-quarter EPS is pegged at $2.68, representing an improvement of 20.7% from a year ago (read more: Vulcan Materials to Report Q3 Earnings: What Should Investors Watch?).

Johnson — the global leader for smart, healthy and sustainable buildings— topped earnings estimates in all the trailing four quarters, with the average surprise being 4.9%.

Johnson is likely to beat expectations when it reports fourth-quarter fiscal 2025 results. This Zacks Rank #3 company has an Earnings ESP of +1.94%.

The Zacks Consensus Estimate for Johnson’s fiscal fourth-quarter EPS is pegged at $1.20, representing a decline of 6.3% from a year ago.

EMCOR — leading providers of mechanical and electrical construction, industrial and energy infrastructure— topped earnings estimates in all the trailing four quarters, with the average surprise being 16.8%.

EMCOR is likely to beat expectations when it reports third-quarter 2025 results on Oct. 30, 2025. This Zacks Rank #2 company has an Earnings ESP of +0.20%.

The Zacks Consensus Estimate for EMCOR’s third-quarter EPS is pegged at $6.65, representing14.7% growth from a year ago (read more: EMCOR Before Q3 Earnings: Buy, Sell or Hold the Stock?).