Marcum Commercial Construction Index

Third Quarter Construction Update: The Good, (The Strictly Okay), The Bad, and The Ugly
Issue 45 - Third Quarter 2023

The construction industry, much like the broader economy, carried a surprising amount of momentum through the end of the third quarter. Construction spending is outpacing inflation on an annual basis.  Material price escalation has moderated. Contractors continue to hire. Even residential construction remains in decent shape  despite the paralyzing effects of high interest rates on home buying.

There are, however, several headwinds facing the construction industry. Elevated borrowing costs and tight credit conditions have severely diminished demand for  certain types of construction, and worker shortages, long an issue for contractors, are driving up the cost of labor, exacerbating the effects of material price escalation that occurred in 2021 and 2022.