An Economic Forecast … Of Sorts
Should there be a recession in 2023, chances are that it will surprise few people. According to CNBC, economists have generally been forecasting a recession to begin early this year. And while there is a general consensus on a 2023 recession happening, there are vast differences of opinion on how it will look. For the construction industry, increases in infrastructure spending are tempered by continued supply chain concerns and higher supplier prices. (See our Overview of Selected Materials Costs below) However, some construction executives see increased federal spending as a counterweight to recession fears.
Recession watch: Why the next one will be different (Construction Dive)
Markets fully price in quarter-point interest rate hike in February as inflation slows (CNBC)
Survey: The U.S. economy has a 64% chance of entering a recession this year (Bankrate)
Dallas Fed President Lorie Logan: “One of the questions I’m asked most often is: How much more will we do? More specifically, how high will we raise interest rates? Or, as my family used to ask on our road trips back home to Kentucky: Are we there yet?”
Deep Dive: The U.S. economic outlook and monetary policy (Federal Reserve Bank of Dallas)
Staying Alive: High Profile Safety Failures Prompt Investigations, Changes
A deadly scaffolding collapse in Charlotte. A five-year high in construction fatalities in New York City. Increased OSHA scrutiny on construction jobsites. With the fatality rate for the construction industry holding steady over the last decade — with no signs of improvement in the most recent numbers — policymakers are looking for a better way forward. In addition to OSHA, localities are getting involved to protect workers within their jurisdictions.
More construction companies ask for OSHA training after deadly scaffolding collapse (WSOC)
1st Harris County commissioners court meeting of 2023 aims to make construction sites safer (ABC13)
New Study Looks at Apprentice Training and Safety at Work (OH&S)
According to the Bureau of Labor Statistics (BLS), total nonfarm payroll employment increased by 223,000 in December, and the overall unemployment rate declined to 3.5%. Employment in the construction industry increased by 28,000 jobs in December, with specialty trade contractors adding 17,000 jobs. This increase is slightly above the average monthly job gains per month in the sector in 2021. Non-seasonally adjusted unemployment in the construction industry was 4.4% in December, down from 5% in December 2021.
Overview of Selected Materials Costs (December 2022, U.S. Bureau of Labor Statistics PPI)
Technology To Work Smarter, Not Harder
Increased labor and materials prices, combined with competition from large firms, have the potential to squeeze margins and drive small construction companies out of business. But increasingly, these smaller firms are able to utilize technology to even the playing field. By optimizing their fleets, identifying and retaining top performers, and finding increased operational efficiencies, small companies are finding new ways to thrive.
Interested in harnessing technology to make better business decisions? Click here to learn more about T3 – The Operating System for Construction.