b"(continued from page11) Keeping watch In the opening months of 2024, economists are advising construction companies to keep an eye on some key statistics to get an idea of how the year willSidebar: Prepare for a Soft Landing turn out. One leading indicator the constructionU.S. Gross Domestic Product (GDP) Annual % companies should look at is the level of permits issuedChange for various construction activities, whether they are2014: 2.3% single family homes, apartments, or non-residential,2015: 2.7% said Basu. Another would be the Architecture Billings2016: 1.7% Index, which is a reflection of architect activity. If the2017: 2.2% architects and engineers are busy upstream, it means2018: 2.9% contractors will more likely be busy downstream.2019: 2.3% 2020: -2.8% [this is a negative number] While construction companies tend to focus on2021: 5.9% materials prices, which have recently been roughly flat,2022: 2.1% Basu said that the cost of money has a much greater*2023: 2.1%effect on the bottom line. Pay close attention to what*2024: 1.4%Federal Reserve policy makers are saying aboutCaption: Economists predict slowing growth forinflation early in 2024, and assess how that will affect2024.interest rates, which are already so high that theySources: World Bank; * = projections by Moodysforeclose the possibility of many projects movingAnalytics.forward because they simply don't pencil out[End of sidebar]anymore. Conerly advises keeping an eye out for two statistics that might indicate a pending downturn. One is any increase in initial claims for unemployment insurance. Another is an inversion of the yield curve, in which short term interest rates exceed long term ones. Whatever the condition of the tea leaves, businesses in general will encounter a tougher operating environment in 2024, characterized by a need to finesse a tight labor market and reluctant lenders. In the coming year we will face uncertainty about inflation and interest rates, shortages of labor, higher energy costs, a slowdown in Chinas economy, and recurring threats of a federal government shutdown, said Palisin. There are a lot of spinning plates in the air, and some of them may fall and crack. Phillip M. Perry 19"