While an easing of pandemic-era price spikes is welcome news, construction has been grappling with new challenges this year.
High interest rates, strict equity requirements, banks that have restricted or exited commercial real estate and extreme lead times for certain materials continue to hinder overall construction activity, especially on the private side, according to Ken Simonson, chief economist at the Associated General Contractors of America.
“Contractors working on developer-financed projects — multifamily, warehouse, office, perhaps retail and lodging — are reporting multiple challenges that developers are experiencing,” said Simonson. “That is leading to some project deferrals, though not necessarily outright cancellations.”
