Peter Tateishi
Chief Executive Officer
AGC of California

When the calendar turned over on Jan. 1, the prospects for the Los Angeles construction industry seemed positively rosy. According to Dodge Data & Analytics, the volume of construction starts in the Los Angeles metropolitan area was on track to exceed $27.2 billion in 2025, a 13% increase over the prior year. Residential construction spending was slated to top 2024 by more than $1 billion.

Additionally, a number of big ticket projects in the pipeline, such as the Los Angeles Convention Center Remodeling, had come on line as well as ongoing infrastructure development linked to the 2026 World Cup and 2028 Olympics.

“Those have been a priority from a lot of agencies, and it has been keeping our members very busy, building our backlog of work as well,” says Peter Tateishi, CEO of AGC of California.

The upbeat outlook crumpled before the new year was a week old as a series of wildfires swept across western Los Angeles. The blazes consumed more than 57,000 acres, and at least 16,000 properties were damaged or destroyed. A total of 29 people are believed to have perished.

The first phase of cleanup began in late January and involved Environmental Protection Agency teams scouring the areas impacted by the fires to identify and remove hazardous materials from homes and structures. On Feb. 10, FEMA and the U.S. Army Corps of Engineers launched Phase 2 of debris renewal for private residential properties in the Eaton and Palisades wildfire impact zones. The process is expected to take months, and until it’s complete, the rebuilding efforts will be on hold.

Tateishi says the AGC of California members are ready to take action while also meeting the needs of their existing backlogs.

“Our contractors are confident that they can meet the pressures of both when it comes to this, as long as it’s coordinated and well organized,” he says.

Tateishi says that at one level it will require coordination between all of the agencies involved in the recovery: federal, state and local. At another level, it will be coordination between the contractors handling the cleanups, an effort the AGC members are already looking at.

“The more coordinated government can be, the better we will be able to respond to this without it impacting the everyday demands that were there already,” Tateishi says.

Coordination is only the first hurdle facing the contractors because the industry’s ongoing issues haven’t gone away. A recent optimism survey of AGC of California members identified two key areas of concern: workforce development and the ongoing regulatory environment at both the state and federal level.

Finding qualified employees is only likely to get more difficult given the demands of rebuilding and ongoing polit-ical uncertainty.

Following President Donald Trump’s inauguration on Jan. 20, contractors have been struggling to digest a seemingly endless barrage of policy pronouncements and course corrections from the Oval Office.

From the possibility of federal funding being halted on projects to the spectre of tariffs upending supply lines, the singular effect has been “whiplash,” Tateishi says.

“It puts us in a precarious position because we’re here, we’re here to build, we’re here to get things built for our communities,” he says. “And now this uncertainly comes into play.”

Contractors, he says, are now facing a dilemma on whether they should wait for work that is already in their backlog, but that work may or may not be funded.

“In an industry that needs long lead times, uncertainty is a real problem,” Tateishi says.

For the AGC, the primary task is working with the agencies and elected officials to find clarity and ensure progress is made.

“Our job really is to advocate with the government [and to] try to get them in alignment, to say, let’s do the right thing,” he says.

Still, the ongoing uncertainty complicates the already daunting task of rebuilding while also successfully completing the existing backlog of projects, Tateishi says. And the ripple effects will be immense.

“It will affect the entire economy in California and especially in the Los Angeles area because they’re going to have additional pressures on the economic drivers of construction,” he says.