Dr. Anirban Basu, Chief Economist for the Sheet Metal and Air Conditioning Contractors’ National Association ( SMACNA), shares his insights and forecasts about the economy and its impact on the construction industry for 2024:            

• Growing Industry Employment 

• Given the elevated numbers of construction job openings presently and an abundance of megaprojects set to break ground, industry employment is poised to expand in 2024.

• Growth Opportunities in Megaprojects

• Various metropolitan areas will experience a surge in manufacturing-related megaprojects.
• Manufacturing-related megaprojects will surge in 2024 across the country as a result of reshoring in supply chains.

• Mixed Outlook for Contractors

• The upcoming year will present varied challenges and opportunities for contractors. Contractors focusing on public works are poised for a successful year thanks to increased funding from Infrastructure legislation, while those working on residential properties will likely see a shore up of projects due to a tough real estate market.

• Economic Themes

• The economy’s focus on reshoring supply chains will remain prominent, alongside expectations for increased publicly financed construction in the upcoming year.

• Factors to Consider

• While recent good news on inflation is a tailwind there are several risks to look out for in 2024 including:

• High consumer debt
• Geopolitical uncertainty
• Stricter credit conditions
• The government’s increasing debt burden

• On a positive note, bond markets suggest a likely decline in interest rates by mid-2024. This decrease could benefit by providing better support for project financing and backlog generation.

• Challenges Ahead

• For many sheet metal and related contractors, the greatest challenges will continue to take the form of retaining and recruiting talent. Wage pressures will remain apparent economy-wide and in place if the economy slows at some point next year. 

• The team at SMACNA and their union partners at SMART will continue to advocate for students to become involved in the trades to help develop the next generation of talent.