Q1 Construction Report: Insights on the Industry’s Economic Environment
Insights into Raw Material Prices, Labor Costs, Materials and Risks for the Construction Industry
The Q1 Construction Economic Report is a comprehensive analysis of the construction industry’s macro-level factors that affect the industry. This report is a collaboration between CICPAC, economist Dr. Chris Kuehl and Armada CI, and it’s specifically designed to offer insights into the construction industry’s economic environment.
Highlights from Q1 Construction Economic Report
- Real GDP estimates for Q1 were much stronger than expected, with growth at just over 3.3%. However, current forecasts show a slight contraction in the second, third and fourth quarters.
- Raw material shortages are becoming a concern, with inventories at multi-decade lows and some key indexes, such as the Baltic Dry Index, showing surging demand. Inflation could quickly accelerate, and shortages/stock outs of critical raw materials may still be problematic.
- Labor costs continue to be at or near all-time highs, with the construction sector Employment Cost Index trending 1.4% higher quarter-over-quarter. Job openings in the construction sector were still elevated, but down significantly from last year’s peak.
- Recession risk is still a priority concern, with the market convinced that central banks will slow rate hikes and the Fed will be satisfied with interest rates between 4.5% and 5.0%. Banking credit conditions are also tightening, with nearly 50% of banks already tightening before the current change in banking conditions.
Read the entire survey report for in-depth information about the industry’s challenges, supply chain trends, spending by sector and banking insights.
Please contact Mark Barnett, Adams Brown’s construction accountant leader for more information.