Like all other industries, construction has grappled with the ongoing effects of the COVID-19 pandemic, inflation and supply chain issues. "As many industries brace for an economic downturn heading into the new year, the construction industry is tasked with managing increased lead times and increasing costs from material prices to labor, while also supplying the built environment its crucial needs," per Dodge Construction Network.
This year, total construction starts fell 18% in November to an annual rate of $926.3 billion. Nonresidential building starts fell by 25%, nonbuilding lost 21% and residential starts fell by 5% during November.Due to supply chain issues, construction projects are taking longer than usual to start. The report shows that there have been improvements in education, healthcare and environmental project timelines but "the life cycle for office and hotel projects continues to elongate." With that, they project that the economy will slow, unemployment rates will rise and that some parts of the construction sector will face recession.
Still, some are optimistic about the future of construction in 2023. "Construction is at a pivotal moment surrounded with opportunities to innovate and reimagine its trajectory with new practices that impact the bottom line and contribute to positive societal changes. Despite the clouds on the horizon, the future of construction remains bright," reads the Dodge Construction Network Year End Report.