b'ECONOMIC UPDATE(These figures represent the Federal Reserveshousing activity, a mighty driver for the economy. preferred measure of inflation: the core personalWe forecast housing starts to increase by 6.2% in consumption expenditure deflator (PCED) which2025, after falling by 4.7% in 2024 and declining strips out volatile food and energy prices). 8.4% in 2023, said Yaros.RelieffromthecostsofinterestandinflationWhy the rebound? A decline in the cost of money will help fatten the bottom lines of businessesand a concomitant loosening of credit standards. everywhere. We anticipate corporate profits willLower mortgage rates should help the single-increase 7.1% in 2024 and 5.8% in 2025, up fromfamily home market, said Bill Conerly, Principal of their 1.5% gain in 2023, said Yaros. his own consulting firm in Lake Oswego, Oregon Reports from the field confirm the economists(conerlyconsulting.com). It will be a little less optimistic view. Our members are looking forwardpainful for people with 3% or 4% mortgages to give to a growth year in 2025, largely from expectationsthem up, sell their current houses and move up.that interest rates will decline, said Tom Palisin,Housing is not the only construction sector that will ExecutiveDirectorofTheManufacturersdo well. This is the era of the megaproject, and Association, a York, Pa.,-based consortium withfuture prospects are quite positive for contractors nearly 500 member companies (mascpa.org).who are able to participate in major public works, The change in fortunes cant come soon enough,said Anirban Basu, Chairman & CEO of Sage he added. High interest rates have been puttingPolicy Group (sagepolicy.com). Basu noted that constraints on many of our members who havemuchconstructionactivityisbeingdrivenby been trying to maintain their financial margins, sothe re-emergence of industrial policymaking in relief in this area will be helpful. America, an economic transformation that has led Construction rebounds to programs such as the Inflation Reduction Act, Analystsexpectconstructioncompaniesandthe Chips and Science Act, and the Infrastructure manufacturers to share in the nationwide economicInvestment and Jobs Act. upsurge. Economists expect healthy growth inManufacturers are receiving billions of dollars in subsidies for large-scale infrastructure projects, Continued on page 16'