Construction Forecast (CONT’D FROM PAGE 26)
Board Converting NEWS INTERNET DIRECTORY
Housing is not the only construction sector that will do well. “This is the era of the megaproject, and future prospects are quite positive for contractors who are able to participate in major public works,” said Anirban Basu, Chairman & CEO of Sage Policy Group (sagepolicy.com). Basu noted that much construction activity is being driven by the re-emergence of industrial policymaking in Ameri- ca, an economic transformation that has led to programs such as the Inflation Reduction Act, the Chips and Science Act, and the Infrastructure Investment and Jobs Act. “Manufacturers are receiving billions of dollars in subsi- dies for large-scale infrastructure projects, computer chip and battery manufacturing plants, and data centers, many in support of technological transformation such as the growth of artificial intelligence,” said Basu. For contractors dependent upon multifamily construc- tion, hotels, or retrofits of existing office space, the 2025 outlook is a bit more bleak. “High interest rates have led to very high financing costs, along with the general inflation experienced within the construction sector,” said Basu. “And banks have become more reluctant to lend, partly because of an increase in regulatory oversight. As a result, certain contractors have become vulnerable to a lack of work, and they are quite concerned about 2025.” A change in fortune will not happen overnight. “With lower interest rates, there'll be an easier time lining up project financing at acceptable cost,” said Basu. “But these things take time. We might see some softness in a meaningful fraction of contractors in 2025. And then per- haps things get a bit better in 2026 as these lower interest rates prompt more activity.” Healthy Employment The economy does better when people are optimistic, since consumer spending accounts for a large portion of the nation’s business activity. While consumers remain troubled by the residual effects of inflation in the form of high prices for gas and groceries, they remain in a fairly good mood. “We look for consumer confidence to move slightly higher in 2025,” said Scott Hoyt, Senior Director of Consumer Economics for Moody’s Analytics (economy. com). Why the optimism? Healthy employment levels. “We look for the unemployment rate to end 2025 at 4.3 per- cent and 2026 at 4.2 percent,” said Yaros. This is rough- ly in line with the 4.1 percent reported toward the end of 2024. (Many economists peg an unemployment rate of 3.5 percent to 4.5 percent as the “sweet spot” that balances the dual risks of inflationary wage escalation and econom- ic recession.) If favorable unemployment figures will encourage con- sumer spending, employers should also enjoy relief from the deleterious effects of the past year’s tight labor condi- tions. “While many contractors continue to view the lack of skilled labor as their number one challenge, it is not CONTINUED ON PAGE 30
ARC INTERNATIONAL www.ARCInternational.com
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AES (ADVANCED EQUIPMENT SALES) www.aesales.net
AES is a leading full-service provider of integrated convey- ance systems specializing in scrap, trim, and dust. AES en- gineers custom scrap systems and works as a partner in process improvement to help businesses achieve greater profitability, productivity, and sustainability. Products include balers, shredders/hoggers, core shredders, filters, fans, and specialized dust control and collection systems. AES is the ex- clusive distributor for the AirShark Rotary Material Separator. For a wide variety of new and used equipment on to- day’s market, visit our website at www.acm-corp.com. BAUMER HHS CORPORATION www.baumerhhs.com hhs is a global leader in advanced gluing, camera verifica- tion and quality assurance systems for the packaging indus- try. Zero-defect quality and elevated production speeds are key parameters in the manufacturing of corrugated boxes. With hhs Xcam Box Monitoring and non-contact flap gluing of corrugated board, hhs offers every option for quality as- surance in the production of boxes with flexo folder gluers. AMERICAN CORRUGATED MACHINE www.acm-corp.com BLOWER APPLICATION COMPANY (BLOAPCO) www.BloApCo.com BloApCo has served the corrugated industry since 1933 with a variety of scrap handling solutions, including Hori- zontal Floor Shredders, Trim Cutters, and Material Handling Fans and Conveying Systems. BloApCo Shredders allow for continuous shredding and pneumatic removal of sheet waste stacks of all sizes, roll slab, cores, and carton scrap.
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October 21, 2024
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