Economists and contractors agree that a recession seems likely in 2023, but compared with past housing downturns, this one is hitting a market that has shown rather healthy growth over the past several years (with the exception of fast-paced inflation). In the months leading up to the Great Recession, nonresidential construction employment growth averaged 3.3%, and in the last seven months of 2022, that number was around 6.3%, according to Construction Dive.
At the same time, however, interest rates pose an ongoing challenge for builders, homeowners, and prospective buyers alike in 2023. In addition, housing experts warn that the days of supply chain hurdles and price hikes slowing construction progress are far from over.
“What we’re seeing today is the continued impact of the last couple years of inflation and it’s starting to catch up on the marketplace,” said Derek Cuntz, executive vice president at Mortenson, a Minneapolis-based construction company. “The last couple of years have seen significant cost increase, that’s starting to make it tougher to get some deals done.”
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