Q2 Construction Report: Navigating Economic Fluctuations
Labor, Manufacturing and Material Insights for the Construction Industry
The Q2 Construction Economic Report offers a thorough investigation of the changing economic scenario in the construction industry. Comprehensively analyzing key parameters such as real GDP, raw material prices, labor costs and manufacturing materials, the report provides a roadmap for stakeholders charting the economic landscape.
Highlights from Q2 Construction Economic Report
- Gross Domestic Product (GDP): Contrary to early 2023 predictions of an impending recession, the first quarter exhibited a GDP gain of 2.0%. The Atlanta Fed’s latest forecast projects a 2.3% growth rate, close to the 25-year average of 2.5%, with the consumer and the service sector fueling this expansion.
- Raw Material Prices & Availability: Inventories of essential raw materials like copper, zinc, lead, aluminum and nickel are at near multi-decade lows. While the global economic slowdown has mitigated the immediate impact of this shortage, a resurgence in global demand could stimulate inflation. Early signs of rising raw material demand are suggested by a recent uptick in the Baltic Dry Index.
- Labor Costs: The construction sector grapples with high labor costs and a shortage of skilled labor. The Employment Cost Index reveals an annual labor cost increase of 5.7%. Despite a decrease from last year’s peak, job openings in the construction sector remain high.
- Manufacturing Materials: Global PMI data is in the expansion phase, despite a contraction within the US. The slowdown in purchasing, likely due to high inventory levels in wholesale trade and manufacturing, could alleviate some pressure on raw material availability.
Read the entire survey report for valuable insights to comprehend market trends and adjust your strategies in this uncertain economic landscape.
Please contact Mark Barnett, Adams Brown’s construction accountant leader for more information.