b'start of a trend, though, we could start to see more activity Contractors Welcome Rate Cut, and movement in privately funded projects. Push for More Firms said the quarter-point reduction will provide aNevertheless, the cut will allow certain projects to issue a meaningful confidence boost, especially for private pro- notice to proceed, said Robert Brown, CEO of GCMjects, though likely wont boom construction activity.Contracting Solutions, a Fort Myers, Florida-basedgeneral contractor. Projects with capital-ready owners, Contractors finally got the news they had been waitinglender terms substantially set, permits and design in ad-on, a rate cut that could rouse the sleeping constructionvanced stages and a delivery partner already engaged are market.most likely to cross into the construction phase soon, he added. The Federal Reserve cut its benchmark interest rate by 25 basis points on Wednesday afternoon. The move shouldRate cuts help at the margins, but in our world its not a provide the construction industry with a much-neededmagic switch, Brown told Construction Dive. Owners confidence boost and push nearly ready projects acrosswho were already within reach may use this as thethe starting line.moment to green light. More importantly, it could finally wake up the bear fromValue of strong teams, further cuts its slumber, said Scott Lyons, the commercial core Brown said though a cut can get owners off the sidelines, market leader at DPR, a Redwood City, California-basedwhat really will shorten timelines today is the team put general contractor.around the project. Lyons agreed, adding firms that jump in now are best advised to bring contracting partners to Nonresidential construction spending slipped in July andthe table to assess labor availability as early as possible. trails last years level by 1.1%, according to the mostrecent available data. Builds financed with privateThe labor market is the wild card, said Lyons. He added funds have largely struggled, though data center even if lower interest rates jumpstart demand for newconstruction continues to boom.projects, the cost of labor could quickly diminish thesavings from lower borrowing costs. Some mixed-use and hospitality projects should move forward with an occasional Class A+ office, Lyons toldContractors in Florida see the rate cut as overdue, but Construction Dive. We have been seeing an uptick inworry the bigger picture is still uneven, said Peter Dyga, tenant improvement projects for the fall quarter, whichpresident and CEO of Associated Builders and Contrac-shows theres some budding momentum.tors Florida East Coast Chapter. Most commercialbuilders remain busy today, but are a bit more wary But contractors say one cut will not reset the market, regarding backlog a year or more out. especially with labor costs and trade policy cross-winds still in play. For DPR, meaningful activity will onlyThats where cheaper borrowing could make a difference, arrive with a series of cuts that steadily ease pressure onsaid Dyga. developers, said Lyons. I think this rate cut is just going to do wonders, certainly Although a cut of 25 basis points is a good start, wefor the economy, Dyga told Construction Dive. dont believe this first cut will be enough to start the Probably not as big a cut as we like, but we know how engine, Lyons told Construction Dive. We believe itthey can stack up over time in terms of the reductions. will take a series of cuts in order to get some dealmomentum underway.Contractors expect further rate cuts before the end of 2025 to unlock even more activity. The Fed willOther contractors feel the same way.announce interest rate decisions again at the end ofOctober and early December. For example, Granger Hassmann, regional president at Adolfson & Peterson, a Minneapolis-based general A cut often has a psychological impact. It boosts confi-contractor, said though the decision is a step in the rightdence, said Brown. Even if the math only changes direction, it remains hard to say if there will be any slightly, it can make owners feel better about taking the immediate impact on the private market.plunge. Thats important in construction, becausesentiment and timing drive just as much as numbers on a From where we stand, it might help projects that were onspreadsheet. the edge of being financially viable, but one small rate cut on its own probably wont lead to a big global shift justSebastian ObandoReporteryet, Hassmann told Construction Dive. If this is the 16'