The Federal Reserve has again raised interest rates by threequarters of a percentage point, the latest in a series of hikes attempting to cool rapid inflation. Recessionary fears were further stoked by the latest GDP figures showing a 0.2 percent decline in the second quarter, after a 0.4 percent decline in the first.

While the labor market remains strong and company profits are very high, consumer spending is lagging faced with rapidly rising prices and tightening credit conditions. The short-term impact on the construction market has been seen in the recent slowdown in new housing activity and other indicators of
activity. Ducker now expects 2022 full year volume activity to end flat compared to 2021, giving back the gains made in the first half of the year. We forecast that while non-residential building activity will pick back up later this year and through 2023, declining residential new construction activity through 2023 particularly will drive a modest fall in overall residential expenditures (current dollar basis) before recovery from a relatively mild recession begin in 2024.

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