ARTICLE
According to the latest outlook from ECA’s partners at the Finishing Contractors Association (FCA), the construction industry continues to face many of the same headwinds that buffeted it throughout 2022, including labor shortages, elevated material costs, and high and rising interest rates. While overall construction spending expanded throughout the year in both the U.S. (+7.7%) and Canada (+4.7%), spending dipped on a monthly basis in December, falling 0.4% and 6.3%, respectively. Key points of their latest outlook include: Construction spending declined in both the U.S. and Canada in December 2022 but remains up on a year-over-year basis; Nonresidential spending has been buoyed by manufacturing-related activity but remains relatively weak; Material prices reaccelerated lately despite earlier signs of moderation; Labor shortages persist, frustrated contractors and pushing construction wages higher; High interest rates have damaged some sectors, but many remain unaffected. The upshot is that interest rates will have to be raised higher and remain there longer than previously anticipated, increasing the odds of a recession. Click here to read the full report.
According to the latest outlook from ECA’s partners at the Finishing Contractors Association (FCA), the construction industry continues to face many of the same headwinds that buffeted it throughout 2022, including labor shortages, elevated material costs, and high and rising interest rates. While overall construction spending expanded throughout the year in both the U.S. (+7.7%) and Canada (+4.7%), spending dipped on a monthly basis in December, falling 0.4% and 6.3%, respectively. Key points of their latest outlook include: Construction spending declined in both the U.S. and Canada in December 2022 but remains up on a year-over-year basis; Nonresidential spending has been buoyed by manufacturing-related activity but remains relatively weak; Material prices reaccelerated lately despite earlier signs of moderation; Labor shortages persist, frustrated contractors and pushing construction wages higher; High interest rates have damaged some sectors, but many remain unaffected. The upshot is that interest rates will have to be raised higher and remain there longer than previously anticipated, increasing the odds of a recession.
Click here to read the full report.