Inflation, rising interest rates and a possible global recession continue to top the list of forecasters’ concerns for the coming year.
“The key issue facing the economy now is inflation, [which is] determining its path as we move forward,” says Richard Branch, chief economist at Dodge Construction Network. While he says the Federal Reserve was “a little late to the party,” a reference that it kept interest rates too low despite signs of post-COVID-19 economic recovery, the central bank now is aggressively raising them to reign in further inflation impacts. Should this be successful, Dodge expects rates to steady in the first quarter. “That should allow the economy to stabilize and start to recover in the back half of 2023,” Branch says. His forecast expects the U.S. to avoid a “technical” recession, but in many construction sectors, “it is going to feel recessionary,” he says.