The following is an excellent summary of what 2022 will bring to our industry, as written by Anirban Basu, Chief Economist for Associated Builders and Contractors, in December 2021.
“After the dramatic pace of economic recovery that characterized 2020’s final eight months and the early months of 2021, economic growth is set to soften in 2022. While recession appears unlikely in the near-term, there are many factors suggesting that the year to come will not produce a further boom in activity.
“Among these factors are:
- Less growth in federal spending;
- Ongoing global supply chain disruptions; and
- Rampant worker shortages.
“While there may be some alleviation of the challenges produced by the latter two factors, the economy will continue to face substantial headwinds.
“With so much going on, it is simple to forget what really matters. More than anything else, economic activity is driven by flows of capital. That capital could become more expansive in 2022 as monetary policy shifts, producing likely increases in interest rates in the process. With so many economic actors so fully leveraged, even small increases in interest rates can produce substantial drag on the economy. A sudden surge in borrowing costs could be enough to throw the 2022 economy into reverse, though such a surge appears unlikely. Still, contractors and other construction industry stakeholders should be eyeing interest rates closely over the year(s) to come.”
Miles-McClellan is experiencing all three factors listed above. However, our backlog remains very strong. There continue to be more opportunities available than we can pursue because of our internal bottleneck of lacking team availability.
While it is challenging, we will continue to focus on our client’s needs and work hard to NOT over-promise and under-deliver!
Basu, A. (2021, December 1). 2022 Construction Economic Forecast – The Recovery Could Have Been So Much Better. Retrieved from constructionexec.com : https://constructionexec.com/article/2022-construction-economic-forecast