CLEVELAND, Dec. 11,
2024 /PRNewswire/ -- The CBIZ Commercial
Construction Index for the third quarter of 2024 reports that
the construction industry retained momentum heading into the year's
final months.
The index, produced by the CBIZ National Construction Services
group, reveals significant trends in both nonresidential and
residential construction activities.
Infrastructure projects and ongoing manufacturing megaprojects
once again drove nonresidential construction activity.
"Manufacturing-related construction spending remains
extraordinarily elevated due to federally incentivized megaprojects
and a broader effort to reshore production capacity," said
Anirban Basu, Chief Construction
Economist at CBIZ. "While the incoming presidential administration
may be less amenable to legislation like the CHIPS and Science Act
and the Inflation Reduction Act, its trade policy should induce
more reshoring, supporting ongoing momentum in the manufacturing
segment."
In contrast, residential construction activity, although still
high compared to pre-pandemic years, has slowed throughout the
first nine months of 2024. "While there remains a structural
shortage of housing units in this country—a shortage that
homebuilders will eventually address—residential activity is likely
to slow in the coming quarters and won't rebound until interest
rates are meaningfully lower," said Basu.
Despite some softness in the residential segment, contractors
continued to increase their staffing levels during the third
quarter. "The construction industry added jobs for the fifth
consecutive month in October, and job gains would have been faster
if not for hurricanes Helene and Milton," said Basu. "The industry
has hired new workers at a blistering pace over the past year,
adding employees at exactly twice the rate of the broader
economy."
Lower material prices have helped to contain construction costs
in 2024, although the outlook now has significantly higher
uncertainty. "Despite this recent input price moderation, the next
presidential administration's trade policies introduce significant
uncertainty to the outlook," said Basu. "Tariffs could drive input
prices higher, especially those that come primarily from
China."
Although the Federal Reserve has lowered interest rates,
borrowing costs remain high and lending standards tight. "It
appears likely that the Federal Reserve will reduce the federal
funds rate by another 0.25 percentage points at their December
meeting, and yet bond yields have risen since the election,
suggesting that markets expect interest rates to remain higher for
longer relative to previous forecasts," said Basu.
CBIZ Issues First Construction Index After Acquiring
Marcum
Following the acquisition of Marcum LLP, CBIZ proudly presents
the Construction Index. Now under the purview of the expanded and
enhanced CBIZ Construction team, the Index continues to feature the
high-quality insights it is known for.
About CBIZ
CBIZ, Inc. (NYSE: CBZ) is a leading professional services
advisor to middle market businesses and organizations nationwide.
With unmatched industry knowledge and expertise in accounting, tax,
advisory, benefits, insurance, and technology, CBIZ delivers
forward-thinking insights and actionable solutions to help clients
anticipate what's next and discover new ways to accelerate
growth. CBIZ has more than 10,000 team members across more than 160
locations in 21 major markets coast to coast.
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SOURCE CBIZ