A full year of higher interest rates will cause 2023 to be a slower year for construction activity, said Vornado CEO Steven Roth during the call.
“Steel, concrete and curtain walls are important, but in our business, capital is the essential raw material,” said Roth, who said high interest rates are making funding for projects scarce.
Meanwhile, construction financing, if available, remains “very expensive,” said Franco. Roth said the capital markets are “making it almost impossible to build new.”
Yet the Federal Reserve will likely maintain higher borrowing costs for the considerable future, said Anirban Basu, chief economist at Associated Builders and Contractors, recently in a press release. That could further cause dips in backlog and contractor confidence levels.