Interest rates have slowed residential work, but manufacturing is up 196% this year and will remain strong in 2023, pushed by new federal incentives.

Recession fears, inflation and other issues plaguing the economy in the first half of 2022 have persisted through the third quarter. While most construction sectors have been successful throughout this year, questions regarding what’s to come in 2023 loom large as we head toward the end of the year.

Higher borrowing costs, increasing market pessimism and growing recession risks are combining to slow industry hiring, says ABC economist.

Multi-family work remains strong, but construction spending is down overall as the industry looks to the second half of the year and beyond. 

While commodity prices have begun to stabilize following the extreme volatility of the past several years, recession fears continue to mount.

Construction starts are once again increasing after a slowdown in the fourth quarter of 2021. But labor shortages continue, and after a brief decline, materials prices are again climbing, caused partially by the war in Ukraine.

Although ENR’s indexes measure the costs of non-residential buildings, the housing market has had a major impact on index movement.

As the height of the pandemic continues to recede, contractors still face several ongoing issues, including sky-high materials prices and staff shortages.