What does 2023 hold for the Commercial Construction Industry?
Each December, before we close the books on another fiscal year, it’s quite common to cast a longing eye toward the future and wonder what the new year will hold for the commercial construction industry. So far, things look fairly optimistic for Phoenix Masonry – especially considering the current projects we’re working on that extend into 2023. It’s important to get that 30,000 foot view as well, as many industry experts will tell you that the overall health of the commercial construction industry is prone to the ”ripple effect” from far-reaching corners. We went in search of some answers for you, and this is what we discovered…
External Factors to Consider – Inflation
Before a broad look can be established, it’s helpful to consider the external factors that will have an effect on the commercial construction sector. At the moment, none appear more impactful than the inflationary concerns that have plagued us in 2022. The actual number has been all over the place – and setting record highs for the past few decades as it puts upward pressure on pricing, supply chain, and manpower needs. In 2022, the inflation rate maxed out at 9.1% in June, but since that time has steadily fallen – thanks in large part to the series of aggressive rate hikes from the Fed. The most recent update at the time of this writing is November, in which the number has fallen to 7.1%. While that’s good news, it’s still not a great number. Hopefully, the rate of inflation will continue to drop as we enter Q1 2023.
Skilled Labor Shortages Continue
Commercial construction industry experts unanimously agree that the lack of skilled workers is the biggest problem facing general and subcontractors. Job openings continue to hover in record territory – yet there aren’t enough applicants to fill these positions. Thankfully, some attention has been paid to this issue and slow but sure progress will be made, but it will likely take years to right this particular ship. In fact, five to be exact, if you’re paying attention to the Dodge Construction Network prognostications.
But Materials Pricing Improves
Coinciding with the falling rate of inflation, upward pressure on materials pricing – which has risen as much as 30% – is now on the decline, a most welcome development. This has been one of the single-biggest challenges in 2022 and relief appears to be on the horizon.
Non-Residential Commercial Project Outlook
While non-residential is inexorably linked to commercial projects, the overall 2023 outlook is a mixed bag. The warehouse and office space sectors continue to struggle, but retail locations and hotel construction is expected to continue their upward trajectory. Data centers continue their hot streak – and Denver currently has 8% of all current projects.
In 2023, if you’re looking for a new commercial construction job – or even if you’re considering a career transition to something steadier and more stable, Phoenix Masonry is still in the midst of a recruiting effort. We’re looking for both skilled and unskilled workers to join our team and we invite you to contact us or visit the Careers page on the Phoenix Masonry website. Our full-time employees enjoy the perks of any white-collar jobs, including benefits, paid time-off and holidays, and a 401(k) retirement plan. If you need training, not a problem – we invite you to participate in our apprenticeship program and begin your new journey in commercial construction. You can start by filling out this brief job application (also available in Spanish).
Here’s hoping that Phoenix Masonry will enjoy prosperity and make 2023 the best year yet!