Construction economist: How interest rates, economy will affect building industry in 2023 - San Francisco Business Times

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The Business Journals caught up with Richard Branch, chief economist at Dodge Data and Analytics LLC, about what's on the horizon for the construction market in 2023.

In November, total construction starts declined by 18%, with nonresidential building starts — encompassing sectors like offices, warehouses, hotels and shopping centers — losing 25%, nonbuilding dropping by 21% and residential starts declining by 5%, according to Dodge Data and Analytics LLC, a Hamilton, New Jersey-based data analytics company that closely tracks the construction market.

Here's what else Branch is predicting for the construction industry in 2023. Excerpts have been edited for brevity and clarity. The downside is, it will continue to weigh on the residential sector. We think single-family and multifamily are both set for a downturn in 2023.

There's concern if we do hit a recession, and the development pipeline slows considerably, the construction's labor challenges could become exacerbated if workers leave the industry and don't come back when activity returns. What are your thoughts on how construction's labor issues will fare in the event of a downturn?

 

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