Next year may turn out to be a construction industry thrill ride. Even with the expected recession never materializing, inflation leveling off and the stock market on a sugar high, there could be plenty of climbs, dips and swerves. But it’s harder than ever to see what’s around the corner. High interest rates and tighter credit are likely to slow private construction in 2024, while still volatile pricing for key materials will make it harder to bid longer-term projects—and that could cut into profits, says broker HUB International’s survey outlook for 2024. Worker shortages, higher interest rates and lingering inflation will also prevent some projects from moving forward.
The pervasive bad news about office buildings since the pandemic can make you believe that it is time to hang black crepe around that market. While more companies and government agencies are adopting return-to-office policies, they have not yet reversed the pandemic-born work-at-home phenomenon. Dodge Construction Network says office construction will sink by 2% in 2024 and FMI predicts a 4.4% decline next year. Billings at architecture practices declined sharply in September and October, says the American Institute of Architects/Deltek index. It reflected the lowest score reported since December 2020 during the pandemic height.