According to the latest interim economic outlook by the Organization for Economic Co-operation and Development (OECD), global growth is expected to reach 2.6% in 2023, with annual U.S. GDP growth at 1.5%. In other words, maybe a recession is off the table… for now.
While consumer confidence took a hit in February, other indicators — personal income, layoffs and corporate profits — remain strong. It’s why some economists are referring to the current economic situation as the “Godot recession,” referring to the character from the eponymous play who is constantly said to be en route, but never actually arrives on stage.
Mortgage interest rates were already cooling demand for new homes in the U.S. before Silicon Valley Bank and Signature Bank were shuttered by regulators earlier this month. Now, with First Republic Bank on life support and UBS acquiring Credit Suisse to avert a collapse, there is real concern in financial markets that a financial contagion could damage markets — including the housing market.
However, it hasn’t all been bad news. For the first time since 2012, home prices fell below year-ago levels in February. Increased demand could offset some of the concerns builders may face in accessing credit.
For the construction industry, diversification seems to be key. The ability to bid on projects funded by the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) — most of which are in the transportation and energy sectors — will help contractors meet financial obligations. There are opportunities around the ever-more-attractive modular building industry. And with smaller construction firms able to access powerful technology platforms, there are opportunities for lean growth and business optimization.
Secretary of the Treasury Janet L. Yellen: “Our financial system is also significantly stronger than it was 15 years ago. This is in large part due to post-crisis reforms that provided stronger capital standards, among other important improvements.”
Deep Dive: Remarks by Secretary of the Treasury Janet L. Yellen at the American Bankers Association’s Washington, D.C., Summit — March 21, 2023
According to the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 311,000 in February, led by the growth in the leisure and hospitality, retail trade, government and health care industries. The construction industry added 24,000 jobs in February. The overall unemployment rate rose slightly to 3.6%, with nonseasonally adjusted unemployment in the construction industry down to 6.6% in January, down from 6.9% in January 2023 and 6.7% in February 2022.
Overview of Selected Materials Costs (February 2023, U.S. Bureau of Labor Statistics PPI)
According to the IRONPROS 2023 State of the Industry Construction Technology Report, field productivity software — used to assign jobs and tasks to construction workers and equipment — is the most significant construction technology for 2023. At this year’s CONEXPO-CON/AGG, education sessions on task automation, equipment management technologies and even predictive maintenance demonstrated the truth that software is here to stay in the construction industry. The good news is powerful productivity tools already exist that can do it all — manage assignments, automate tasks like reporting and maintenance scheduling, and deploy machines across multiple jobsites. With T3, you get all of this and more, regardless of the make and model of your machines. Get started with T3 today.
“Let us not waste our time in idle discourse! Let us do something, while we have the chance...” — Vladimir, “Waiting For Godot”