In an environment where economists generally predict a flat construction market in 2023, the forces and issues driving the market become even more important. Overall, construction may be flat, but that doesn’t mean specific markets won’t increase. Ken Simonson, chief economist at Associated General Contractors, points to manufacturing, infrastructure and alternative energy-related projects as being strong. Putting energy in the right areas takes on even more importance.
Catching the right waves is essential too. With the recent spate of government action on infrastructure and other areas, there is increased emphasis on decarbonization and alternative energy that will affect what and how you operate. Wrap all that in a construction environment increasingly devoted to speed, and 2023 looks to be a very interesting year.
Here is what the experts have to say about 2023.
Construction Spending Heads for Big Changes in 2023
Shifts in construction spending should favor metal buildings and metal suppliers
By Ken Simonson, Chief Economist, Associated General Contractors of America
Several major construction segments are expanding rapidly or are poised to do so shortly, even as rising interest rates and a cooling economy chill other categories. Broadly speaking, the changes should be favorable to demand for metal buildings and metal suppliers.
Manufacturing plants are an especially strong niche. The U.S. Census Bureau reported on Dec. 1 that the value of plants started in October nearly tripled from October 2021, climbing 170%.
Several forces are providing a lift to manufacturing construction. Supply-chain disruptions from three years of Covid-related lockdowns, along with heightened risks from Russia’s attack on Ukraine and China’s belligerence toward Taiwan, have encouraged many companies to seek U.S. or nearby suppliers.
Speed
In 2023, the pace of construction will become the most critical priority
Brent Schipper, AIA, LEED AP, founding principal, ASK Studio
In the world of construction, we have all become accustomed to delivering quickly. Speed is the mantra of most businesses. We often joke in our architectural studio that clients spend months to prepare contracts, then require working drawings in weeks. Speed may not be a new priority, but in 2023 it will certainly be the most critical priority.
It appears the pace of 2023 will be like nothing we have experienced. Compare it to the unfamiliar pace of 2020 and 2021 where everything seemed to be in slow motion. Compare the upcoming year with 2022 when we ramped up to a new normal and all experienced the fatigue of the normal pace. We begin 2023 at full pace.
The State of the Metal Construction Industry Justifies Optimism
The industry strong, but we still face challenges in 2023
By Jeff Henry, MBA, CAE, Executive Director, Metal Construction Association
2022 was another strong year for the metal building component industry. Sales in terms of dollars remain high with many industry participants recording record numbers.
As 2022 wound down, members reported a returning sense of normalcy in the industry. After an extended period of volatility in pricing and the supply chain, raw material prices are decreasing or have stabilized. Backlogs in the supply chain largely have been resolved, there is abundant inventory in the pipeline and the supply chain seems capable of meeting existing demand.
Anticipating Sweeter Carrots and Bigger Sticks for Building Decarbonization
A variety of mandates and market forces will lead the way on decarbonization
Alan Scott FAIA, LEED Fellow, LEED AP BD+C, Director of Sustainability, Intertek Building Science Solutions
I am excited about 2023 and beyond as I anticipate significant increases in the push-and-pull on the building industry’s efforts to address climate change, which will lead to a triple-bottom-line win for people, planet and prosperity. New and stricter mandates and regulations coupled with more generous incentives will drive greater adoption and innovation in low-carbon building.
In addition to increasingly stringent energy codes pushing up building performance, new municipal, state, federal and investor-driven mandates will require owners, developers and their project teams to focus on decarbonization of buildings.
For the Residential Metal Roofing Industry, Five Questions Loom Large In 2023
Growth, challenges and advice for the coming year
By Renee Ramey Executive Director, Metal Roofing Alliance
2023 offers some positive signs of hope as we climb out of the pandemic, yet also uncertainty as global markets still reel from supply chain, economic and labor shortage issues.
In many ways, the residential metal roofing industry in the U.S. and Canada is a bright spot. We’re seeing strong growth even in uncertain times. According to the latest Dodge Report, the share of residential metal roofing in the United States has risen from 12% in 2019 to 17% in 2021. The report shows the roofing market has grown overall, and metal is getting a bigger percentage of that share.
Construction Starts to Flatline in 2023
Fed orchestrated slowdown will negatively affect construction
By Alex Carrick, Chief Economist, ConstructConnect
The U.S. near-term construction outlook is about to be negatively impacted by the economic slowdown being orchestrated by the Federal Reserve. The Fed is being aggressive in raising interest rates to slow the economy and fight inflation. First to be affected is the residential component of total construction. New or resale home affordability is taking a hit from a more than doubling in mortgage rates. Housing starts have recently set out on a downward path.
Additionally, many owners in nonresidential market segments are in a quandary about whether they should proceed with construction projects at this time, or rather delay until there is a better consensus about economic prospects overall.