US Total Nonresidential Construction is on a tear. The $923 billion spent over the last 12 months is a record high.
With the data trend up 11.8% from one year ago, we are seeing the fastest pace of growth since before the Great Recession. Yet, the news is fraught with snippets about rising commercial real estate risks and talk of recession. To compound matters, firms are sometimes struggling to find labor, grappling with rapidly changing material prices, and dealing with higher interest rates. What do you need to know, and what can you do?
The key is to understand that spending on nonresidential construction projects lags the US economy by about a year and lags US Single-Family Housing Starts by about two years. Our forecast for slowing growth to take hold late this year in US Nonresidential Construction is predicated on these relationships. Slowing growth will extend into the middle of 2024 before giving way to decline in the latter part of 2024 and into 2025. However, this impact will be far from even when it comes to geographic areas and specific segments of overall nonresidential construction.
Tune in to our June webinar to learn more about these trends, as well as the business actions we are recommending you consider as you strive to maximize profits and reduce risk. We will examine the overall nonresidential construction space from a myriad of angles: by geographic market, by vertical market, new construction vs. remodeling, and vacancy rates. The focus will be on where the opportunities are greatest as well as on the risks that will require careful management on the part of business owners in this sector.
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