Dr. Anirban Basu, Chief Economist for the Sheet Metal and Air Conditioning Contractors’ National Association ( SMACNA), shares his insights and forecasts about the economy and its impact on the construction industry for 2024:
- Growing Industry Employment
- Given the elevated numbers of construction job openings presently and an abundance of megaprojects set to break ground, industry employment is poised to expand in 2024.
- Growth Opportunities in Megaprojects
- Various metropolitan areas will experience a surge in manufacturing-related megaprojects.
- Manufacturing-related megaprojects will surge in 2024 across the country as a result of reshoring in supply chains.
- Mixed Outlook for Contractors
- The upcoming year will present varied challenges and opportunities for contractors. Contractors focusing on public works are poised for a successful year thanks to increased funding from Infrastructure legislation, while those working on residential properties will likely see a shore up of projects due to a tough real estate market.
- Economic Themes
- The economy’s focus on reshoring supply chains will remain prominent, alongside expectations for increased publicly financed construction in the upcoming year.
- Factors to Consider
- While recent good news on inflation is a tailwind there are several risks to look out for in 2024 including:
- High consumer debt
- Geopolitical uncertainty
- Stricter credit conditions
- The government’s increasing debt burden
- On a positive note, bond markets suggest a likely decline in interest rates by mid-2024. This decrease could benefit by providing better support for project financing and backlog generation.
- Challenges Ahead
- For many sheet metal and related contractors, the greatest challenges will continue to take the form of retaining and recruiting talent. Wage pressures will remain apparent economy-wide and in place if the economy slows at some point next year.
- The team at SMACNA and their union partners at SMART will continue to advocate for students to become involved in the trades to help develop the next generation of talent.
