b'ECONOMIC UPDATEfrom Asia. That leads to increases in the cost of transportationandinsurance,whichsqueezes margins for contractors.Palisin confirmed that supply chain disruptions are not a thing of the past. We are seeing shortages aroundsemiconductorchipsandsomeother technologicalproducts,aswellaschemicals, equipmentassembliesandmetalparts. Thats causing production delays and late deliveries.There are a number of causes for the problem.PREPARE FOR A SOFT Over the past year the nation has lacked sufficient skilled workers to meet production demands. AndLANDINGin an environment of high interest rates and slowing growth,companiesdidnotinvestasmuchasU.S. Gross Domestic Product (GDP) required in new facilities. As for the semiconductor situation specifically, theres this huge demand(Annual % Change)coming up against a shortfall in global supply, said2014: 2.5%Palisin. WhiletheU.S.iscommittedtothereshoring2015: 2.9%ofproduction,thetaskofincreasingdomestic2016: 1.8%manufacturing and delivery systems will take time.2017: 2.5%We are not going to turn things around right away, said Palisin. 2018: 3.0%The road ahead 2019: 2.5%Despite optimism on the part of businesses and2020: -2.2% consumers, economists eye some dark clouds on the horizon. In the opening months of 2025, they2021: 5.8%advise construction companies and manufacturers to keep a close watch on the following areas for any2022: 1.9%deleterious changes: 2023: 2.5% # Interest rates * 2024: 2.6%Going forward, the major concern for businesses will be the pace of interest rate cuts and where they* 2025: 1.9%will end up, said Yaros. * 2026: 2.1%# Inflation If the consumer price index returns to positiveCaption: Modest growth in the nations economy will territory, that could throw a monkey wrench intosupport business profits in 2025.many business plans, said Conerly. Sources: World Bank; * = projections by Oxford Economics.# TariffsTariffs amount to price increases for our membersThe US economy has been remarkably resilient who have to buy materials from abroad, said Palisin.despite all the hits its taken over the past few # Geopolitics years, said Yaros. We dont anticipate a recession, An increasing level of turmoil around the world canas the Federal Reserve will be dialing back the disrupt supply chains, throwing a monkey wrenchrestrictiveness of monetary policy, and there are into the economy, said Conerly. no glaring imbalances in the economy.Concerning as these risks are, economists anticipate afairlybenignoperatingenvironmentin2025. www.mrca.orgMidwest Roofer 17'