Nonresidential Construction Sector Healthy, Stable For Now

Nonresidential construction will hold steady for the remainder of 2018, but could see a downturn in 2020 or 2021, according to the Associated Builders and Contractors. The forecast is positive for this year because the construction backlog is elevated; plus, improving fiscal conditions in states and localities have made public entities players in the construction "recovery," ABC chief economist Anirban Basu said in the article. “The 2018 Mid-year Economic Outlook: A Time of Growth and Intrigue” report, published in Construction Executive magazine, said that the strong U.S. economy is helping the forecast, but that rapidly rising interest rates and material prices, combined with international trade issues, could cause a dip in the construction sector in two or three years.

Other factors that could contribute to a construction downturn include the skilled trade shortage and increased costs related to getting materials to the jobsite because trucking firms also are facing a shortage of human capital.

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