b'ECONOMIC UPDATE Macroeconomic OutlookIndustry Snapshots US Real Gross Domestic Product in the second quarter came in Macroeconomic Outlook2.6% above the prior year. However, while consumer and business-Arrow denotes 12-month moving total/average direction. to-business spending trends are above the year-ago level, the Industry Snapshots US Real Gross Domestic Product in the second quarter came in economy is slowing.2.6% above the prior year. However, while consumer and business-Arrow denotes 12-month moving total/average direction. to-business spending trends are above the year-ago level, the We anticipate that the headwinds currently facing the economy will RETAIL SALES economy is slowing.eventually prevail. Our expectation is for a mild recession for the overall economy in 2024. Industrial Production will generally decline We anticipate that the headwinds currently facing the economy will next year, and we anticipate two quarters of real GDP contraction RETAIL SALES eventually prevail. Our expectation is for a mild recession for the WHOLESALE TRADE in 2024 as well. The signs of upcoming decline are varied and overall economy in 2024. Industrial Production will generally decline widespread. Interest rates, at their highest level in decades, are next year, and we anticipate two quarters of real GDP contraction creating higher borrowing costs, which is contributing to slowing in 2024 as well. The signs of upcoming decline are varied and WHOLESALE TRADE macroeconomic demand. On the consumer side, which makes up widespread. Interest rates, at their highest level in decades, are AUTO PRODUCTION more than two-thirds of US Real Gross Domestic Product, finances creating higher borrowing costs, which is contributing to slowing are weakening. Excess savings, which were built up during the macroeconomic demand. On the consumer side, which makes up pandemic, have been eroded by general spending and rising prices; AUTO PRODUCTION more than two-thirds of US Real Gross Domestic Product, finances consumers are leaning more heavily on debt to fund their spending. are weakening. Excess savings, which were built up during the MANUFACTURING While metrics like credit card delinquency rates are rising, they pandemic, have been eroded by general spending and rising prices; remain well below the levels leading up to the Great Recession, consumers are leaning more heavily on debt to fund their spending. which supports our expectation that the downturn next year will MANUFACTURING While metrics like credit card delinquency rates are rising, they not be a repeat of that period.ROTARY RIG remain well below the levels leading up to the Great Recession, which supports our expectation that the downturn next year will We anticipate that the headwinds currently facing the not be a repeat of that period.ROTARY RIG economy will eventually prevail.CAPITAL GOODS We anticipate that the headwinds currently facing the Decline next year will not be felt evenly. Industries which rely more economy will eventually prevail.CAPITAL GOODS heavily on financing, such as construction machinery or larger capital investments, are likely to pull back more sharply than those NONRESIDENTIAL CONSTRUCTION Decline next year will not be felt evenly. Industries which rely more industries for which demand is relatively inelastic, such as food heavily on financing, such as construction machinery or larger or medical. Industries which have government backing, such as capital investments, are likely to pull back more sharply than those NONRESIDENTIAL CONSTRUCTION defense, semiconductors, infrastructure, and renewable energy, are industries for which demand is relatively inelastic, such as food RESIDENTIAL CONSTRUCTION also likely to fare relatively well during the upcoming downturn.or medical. Industries which have government backing, such as defense, semiconductors, infrastructure, and renewable energy, are We are beginning to see green shoots from the housing market. RESIDENTIAL CONSTRUCTION also likely to fare relatively well during the upcoming downturn.Since this industry leads the macroeconomy by roughly one year, recovery in the residential construction sector bodes well for We are beginning to see green shoots from the housing market. recovery in the broader economy in late 2024. We continue to Since this industry leads the macroeconomy by roughly one year, SteepMild Rise Flat MildSteepmonitor this and other leading indicators for signs of recovery and Rise Decline Decline recovery in the residential construction sector bodes well for rise in late 2024 and beyond. recovery in the broader economy in late 2024. We continue to SteepMild Rise Flat MildSteepmonitor this and other leading indicators for signs of recovery and Rise Decline Decline rise in late 2024 and beyond. ITReconomics.com 2023 All Rights ReservedITReconomics.com 2023 All Rights Reserved10 www.mrca.orgMidwest Roofer'