Q2 2023 Construction Delivery Outlook
The construction industry continues to remain highly active across the nation, particularly in our core markets of Dallas and Phoenix. At LGE, we are dedicated to delivering cost-effective projects and innovative solutions, even amidst ever-changing market conditions. Our team remains focused on providing exceptional service and successful project outcomes, no matter the challenges we face.
A summary of the Construction Delivery Outlook key findings include:
Construction labor shortages are not expected to disappear anytime soon. Contractors are experiencing significant demand for mega-projects related to chip manufacturing plants and clean energy facilities, while still struggling with a shortage of younger workers entering skilled trades.
Over the past six months, there has been an improvement in freight and supply chain issues. However, suppliers are now faced with the challenge of balancing softening demand while simultaneously dealing with the effects of past price increases and maintaining competitiveness.
Unpredictability within the supply chain is impacting all aspects of the construction process, including raw materials and transportation. The ongoing war in Ukraine has also led to supply barriers and increased export prices for materials such as copper and aluminum.
Demand by Product Type
There are significant variations in the year-over-year percentage changes for type of structure in square feet millions for each category of construction in the U.S. between 2022 and 2023. The industrial construction market experienced an increase in activity in 2022 with a year-over-year growth of 84.8%. However, this is followed by a significant projected decline of 28.9% in 2023.