US construction contractors warn of weaker conditions in 2024

The construction industry continues to feel the effects of the COVID-19 pandemic, particularly in supply chain issues, according to a recent AEM survey. (Adobe stock photo)

The US construction market faces “meaningfully weaker” conditions in 2024 as economic headwinds build, Associated Builders and Contractors (ABC) has warned.

The warning from ABC chief economist Anirban Basu came as analysis of US Bureau of Labor Statistics showed that the industry lost 9,000 net jobs in March.

One a year-on-year basis, construction employment has grown by 196,000 jobs, an increase of 2.5%.

Non-residential construction employment fell by 1,800 positions net in March, while non-residential speciality trade dropped 6,100 positions. The number of non-residential building jobs fell by 2,800. But heavy and civil engineering added 7,100 new jobs.

The construction unemployment rate declined by 5.6% in March, with unemployment across all industries down from 3.6% in February to 3.5% last month.

Basu said, “The March employment report may hint at growing economic weakness in the months to come.

“While the non-residential construction industry lost fewer than 2,000 jobs, the addition of jobs in publicly financed construction categories masks more substantial weakness in private segments. It is precisely those private segments that tend to be most affected by slowing economic growth, deteriorating confidence and concerns regarding the nation’s banking system.

“While the nation continues to progress economically, headwinds are building. Recession remains a likely outcome within the next 12 months. Contractors generally report healthy backlog and confidence regarding the next six months, but the industry may be positioned for meaningfully weaker conditions in 2024.”