b'ECONOMIC FORECASTof capital equipment is being bought, I am seeing arate, said Yaros. An lot of data center-related equipment in there, saidunexpecteddeclinePOISED FOR A Conerly. Data centers also require a lot of gardenin employment wouldMODEST REBOUNDvariety wiring, connectors, and plumbing for cooling. spur faster interest rate Every sector of the construction industry sharescuts as the Fed seeksU.S. Gross Domestic Product acommonchallenge:laboravailability.Oxfordto reinforce economic(GDP) Economics forecasts an unemployment rate of 4.4%expansion. (Annual % Change)and 4.3% at the end of 2025 and 2026, respectively.# Consumer spending 2015: 2.9%Thats not much higher than the 4.1% clocked atHow is the consumer the end of 2024. Low unemployment, largely due tofaring? poses Basu.2016: 1.8%slowing growth in the nations working age populationBearinmindthat and aggressive immigrationpolicies, can result inmany low and middle2017: 2.5%rising labor costs. incomepeopleare2018: 3.0%Business confidence exhausted financially.2019: 2.5%For all business sectors, money and labor are not theIndebtednessand only production factors on the rise. The real problemdelinquenciesare2020: -2.2% is the world has become much more expensive in theupforcreditcards,2021: 6.6%last few years, noted Basu. Construction materialsmortgages and loans. are more expensive. And of course there are tariffs# Inflation 2022: 2.5%on items like steel, aluminum, and copper.If we get stubbornly2023: 2.9% Little wonder the high cost of doing business is tophighinflation,that2024: 2.8%of mind for many operators. As we head into 2026,willpreventfurther the area of most concern for the construction industryprogressoninterest* 2025: 1.7%is profit margin, said Basu. Many operators arerate, said Basu.simultaneously experiencing an increase in costs ofOxford Economics still* 2026: 2.0%delivering services while demand fades. expects the nation toA subdued economy will challenge Given the variety of business concerns, its littleavoid a recession, andbusiness operations in 2026. wonder many projects are being put on hold. Itsthe expected 2% GDPSources: World Bank; * = hard to engage in cost savings when both materialsgrowth is right aroundprojections by Oxford Economics.andlaborarebecomingmoreexpensive,saidthe level economists Basu. Too often, the pro formas dont pencil out.pegasthenations Many companies are responding by not expandingnatural growth rateone that supports business theiroperationsandtryingtotrimexpendituresactivity,maintainsfullemployment,andavoids at the margins. They are focusing more on cashtriggering inflation. flow preservation by slowing hiring, and being lessPerhaps of even greater importance, though, is a little aggressive in leasing and purchasing equipment,heralded threat to productivity. One thing that sort of particularly equipment impacted by tariff pricing. permeates the whole economic picture right now is This generalized business hesitation is evidenced inthe nations low population growth rate, said Conerly. the numbers.We look for business investment toImmigration is down, due to Trump administration increase by only 1.6% in 2026, after rising by 3% inpolicy. The next generation entering their working 2025 3.6% in 2024, said Yaros.years is about the same size as the retiring boomers, Looking ahead so there will be no net growth in the labor force.As we enter the early months of 2026, economistsRespondingtothistrend,companiesinthe suggest that companies in the construction industryconstruction industry will look for ways to maximize watch these key economic indicators for an idea oftheir return on labor by increasing output per worker, how the year will turn out: noted Conerly. The focus of businesses in 2026 will # Employment be increasing productivitynot by whipping people harder, but by providing them with better tools, better I would pay close attention to the unemploymenttraining, and better first-level managers.www.mrca.orgMidwest Roofer 11'