The Marcum Commercial Construction Index for the first quarter of 2024 reports that the construction industry continued growing despite various challenges.
The construction industry continues to benefit from massive investment in manufacturing structures. “Construction spending on manufacturing structures is up 184% over the past four years,” said Anirban Basu, Marcum’s chief construction economist and report author. “Given the size of many of these projects and ongoing efforts to strengthen the nation’s semiconductor, clean energy, and electric vehicle production capacity, the manufacturing-related construction segment will retain momentum through the entirety of 2024.”
Input prices, after remaining relatively flat throughout 2023, resumed rising during the first quarter. In addition to rising input prices, the industry must grapple with higher-for-longer interest rates. “The year’s first quarter has squashed any hopes of imminent interest rate cuts,” said Basu. “Inflation has accelerated and now appears to be stickier than anticipated. Most forecasters now expect one rate cut at most in 2024, and not until the end of the year.”
Despite higher interest rates and rising material costs, the industry continues to expand. Unfortunately, rapid employment growth has come with rapid wage increases. While the overall industry will likely retain momentum throughout 2024 due to strong manufacturing- and infrastructure-related construction activity, others may struggle.
For the full index, visit info.marcumllp.com/commercial-construction-index-q1-2024.
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