By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE
A recession is not poised to manifest in the second half of 2023 nor in 2024, according to Dodge Construction Network’s mid-year forecast.
That said, the construction industry will continue facing a skilled labor shortage.
“We believe that firms will be wary of letting go too many workers for fear of not being able to rehire them once the economy more steadily recovers in the back half of this year,” said Sarah Martin, associate director of forecasting at Dodge Construction Network. “It’s really that stability in the labor market that allows the economy to show some weakness yet remain resilient and steadily be on that upward trend through 2024.”
Total construction starts’ dollar amounts are expected to increase by 2 percent by the close of 2023 and by another 6 percent next year.
The weakness of single and multifamily housing in 2023 is going to pull down starts by approximately 5 percent and then return to no growth in 2024. Weakness in commercial construction in 2023 and predicted for 2024 is driven by fewer office starts and subdued retail and hospitality construction activity, according to Dodge.
U.S. manufacturing saw 200 percent growth in 2022. In light of that, a slight decline is expected to continue through 2024 while maintaining historic levels of construction activity totaling some $90 billion.
According to Construction Specifier, spending on commercial buildings in 2024 will decline by 1.4 percent. Industrial projects will gain only .4 percent in 2024, with a 3.8 percent increase in institutional facilities construction.