b"THE OFFICIAL NFBA MAGAZINEcontinued from page: 35Wary builders. Reluctant sellers. Sluggish buyers.Every sector of thePOISED FOR A Its all having an effect on the housing market.construction industryMODEST REBOUNDOxford Economics expects starts to fall by 4.3%shares a common in 2025 and decline by another 2.3% in 2026 afterchallenge: laborU.S. GROSS DOMESTIC dropping by 3.5% in 2024. Prices for existingavailability. OxfordPRODUCT (GDP) homes are expected to increase only 1.5% in 2025Economics forecasts an and 2.3% in 2026 after rising by 4.4% in 2024.unemployment rate of(ANNUAL % CHANGE)Concerned about the rising cost of living,4.4% and 4.3% at the2015: 2.9%consumers are cutting back on spending of allend of 2025 and 2026, kinds. Their hesitancy affects the retail sector,respectively. Thats2016: 1.8%ECONOMIC OUTLOOKwhich is an important driver and bellwether of thenot much higher than2017: 2.5%economy. Our forecast for year-over-year retailthe 4.1% clocked at sales growth is 3.8% for 2026, down from thethe end of 2024. Low2018: 3.0%4.5% of 2025, said Scott Hoyt, Senior Directorunemployment, largely2019: 2.5%of Consumer Economics for Moodys Analyticsdue to slowing growth in (economy.com). Much of the increase in boththe nations working age2020: -2.2% years is due to inflation. High prices are a bitpopulation and aggressive2021: 6.6%of a mixed bag, said Hoyt. They undermineimmigrationpolicies, can consumer purchasing power and confidence, butresult in rising labor costs. 2022: 2.5%they also support nominal sales by lifting theBusiness confidence 2023: 2.9% prices of the goods retailers are selling. For all business sectors, 2024: 2.8%Construction woes money and labor are not the Outside of the single-family home market, contractorsonly production factors on* 2025: 1.7%are having problems of their own. Multifamilythe rise. The real problem* 2026: 2.0%builders, working through a backlog of units underis the world has become much more expensive in theA SUBDUED ECONOMY WILL construction, are hesitant to break ground on newlast few years, noted Basu.CHALLENGE BUSINESS ones. I think we'll see less multifamily constructionConstruction materials areOPERATIONS IN 2026. in 2026, said Conerly. Vacancy rates are goingmore expensive. And ofSOURCE: WORLD BANKup and rents have been coming down at the rate ofcourse there are tariffs on* = PROJECTIONS BY OXFORD about one percent a year. items like steel, aluminum,ECONOMICS.Meanwhile, contractors attached to theand copper. commercial, office and hotel markets are feelingLittle wonder the high the sting of a slowing economy, high interestcost of doing business is top of mind for many rates, and an environment rife with uncertainty.operators. As we head into 2026, the area of Many areas of non-residential are trending flat ormost concern for the construction industry is edging down, said Conerly. Even the chip fabs,profit margin, said Basu. Many operators are while still strong, are tapering down. simultaneously experiencing an increase in costs The one bright construction sector: data centers.of delivering services while demand fades.They show no signs of diminishing and are bigGiven the variety of business concerns, its customers for electricians, plumbers, and supplierslittle wonder many projects are being put on of scaffolding and manufactured products of allhold. Its hard to engage in cost savings when kinds. When I look at the detail and the economicboth materials and labor are becoming more statistics of what kind of capital equipment isexpensive, said Basu. Too often, the pro being bought, I am seeing a lot of data center- formas don't pencil out. Many companies are related equipment in there, said Conerly. Dataresponding by not expanding their operations and centers also require a lot of garden variety wiring,trying to trim expenditures at the margins. They connectors, and plumbing for cooling.continued on page: 3736 / FRAME BUILDER - VOL6 6"